Fiat ramps dry up in China, crypto topics censored on social media – Cointelegraph Magazine

This weekly roundup of news from Mainland China, Taiwan and Hong Kong attempts to present the most important news in the industry, including influential projects, changes in the regulatory landscape and blockchain integrations of ‘business.

This week, China is back to work after the week-long National Day celebrations, an event always filled with flags, military parades and enthusiastic nationalism. This year’s version was reinforced by the recent homecoming of Huawei executive Meng Wanzhou after three years in detention in Canada, as well as heightened tensions in the Taiwan Strait. Government regulators have spent most of the past half-year wiping out the cryptocurrency industry on the mainland, a topic that has given the Shanghai man plenty to discuss in this weekly column.

Limited access to markets

On Wednesday, Binance took a step towards compliance by announcing that it would be closing P2P for RMB markets. According to the announcement on Binance’s website, the change will take place on December 31, 2021. During this time, it will verify mainland Chinese users and switch their accounts to withdrawal-only mode. At the same time, users will only be able to withdraw, close positions and other essential functions. Binance will notify the corresponding users by email 7 days before the account change.

Closure of RMB P2P Markets Makes Crypto Ownership A Little Riskier in China

The news has not been well received by the remaining retail holders, who believe that less and less reliable exit ramps are available without resorting to more drastic measures such as offshore accounts. Binance had been one of the most popular P2P marketplaces, largely due to the exchange’s reputation, its liquidity, and Binance’s geographic distance from Beijing. Binance has always maintained that its website is blocked in China and that there is no commercial presence here, so it is exempt from the mainland’s regulatory policy.

There is no denying that a lack of P2P fiat options will make investing in crypto much less comfortable for Chinese citizens living in mainland China. With central bank digital currency eCNY around the corner, stricter fiduciary regulations could make it difficult to move large amounts of fiat in and out of crypto markets. On the other hand, many people are less worried, knowing that over-the-counter markets arise whenever there is an opportunity to provide a service in demand. Technology always has a way to grow where it is needed most.

Read between the lines

The move looks pretty harsh on paper, but there are still some gray areas to consider. It’s no secret that at the start of this year millions of Chinese users were listed on top exchanges and many of them were active traders and big holders. Some of them will likely be deterred by recent government policies and currency rules, and reduce their exposure to the asset class. Others are actively directed to DeFi, as evidenced by the increase in on-chain trade volumes from China.

Other users will simply choose to wait, especially given the rapidly changing nature of national policies. A common belief is that exchanges that choose to self-regulate may not enforce this policy very strictly at first. This is supported by the lack of clarity on how overseas Chinese users should be treated. Users may be able to circumvent the rules entirely by providing proof of international residence or other forms of identity. The silver lining here is that any selling pressure caused by uncertainty or fear from Chinese investors will be mitigated by a long compliance transition period.

For a company that operates completely outside of China, it is very difficult for regulators to enforce policies, especially if the exchange claims to be self-regulating, banning IP addresses and not accepting new Chinese registrations. This is the strategy that exchanges such as OKEx and Gate.io seem to be following, as these two large platforms with Chinese roots announced that they are already fully compliant, do not accept Chinese users and as a result , would not make drastic changes.

A prominent social media influencer on Weibo wrote:

“The content of this ad is a bit strange. I think the exchange will do a self-check and try to discover the remaining Chinese users on the platform, but in the event that after the self-check the exchange announces that there is no no Chinese users, the exchange will just leave them there.

This post was then deleted on Weibo. Currently, all topics related to Binance and other exchanges are censored by social media apps like WeChat.

Decreasing impact

Perhaps the most surprising conclusion of all this has been the market’s indifference to the news. Previous announcements of this magnitude have had a very pronounced effect on the market price. On Wednesday, following Binance’s announcement, the price of BTC briefly declined before rebounding to over $ 58,000 the next day.

What this shows is that the market is placing less weight on the impact of news from China, instead focusing on such stories as the expected ETF approvals in the United States and the surprise of Vladimir Putin. admission on cryptocurrencies. Investors can take comfort in the fact that with more growth and decentralization, market risk is more diversified.

The right to enforce

On October 11, financial magazine Caijing published an article about the enforcement of the recent cryptocurrency crackdown. The bottom line was that the recent announcements by the Central Bank were only hints and that the actual judicial interpretation and enforcement had to come from the prosecution authorities in the justice system. The article implied that judicial bodies were now researching the legality of mining and cryptocurrency companies, and that this could cause problems for rule breakers. Those who had managed to bend the rules might not have run out of hot water yet.

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