Dovey Wan, founding partner at Primitive Ventures, a global digital assets holding company, says China’s government is usually quick to draft new regulatory requirements but might not always enforce them effectively.
While attending a recent forum focused on crypto assets, Wan delivered a presentation in which she clarifies that Bitcoin is not banned in China and that people are allowed to legally hold it. She calls out the five top Bitcoin and crypto myths about China.
- Myth 1 – “Bitcoin is banned in China”
- Myth 2 – “Exchanges are banned in China”
- Myth 3 – “Mining is banned in China”
- Myth 4 – “The Chinese have a hard time accessing crypto assets”
- Myth 5 – “Chinese people are buying Bitcoin to hedge against RMB devaluation”
Wan says crypto exchanges are not completely banned in mainland China. Although some crypto trading platforms such as BTCChina and Yunbi were shut down, exchanges such as Huobi, OKCoin and Gate continue to operate in the country.
Bitcoin miners are also still operating in China with large pools – Poolin, F2Pool, BTC.com and AntPool – reportedly controlling 70% of the hash rate of the Bitcoin network, according to data from Blockchain.com.
While people think it’s difficult for Chinese residents to access crypto assets, Wan points out that Chinese investors holding around $3 billion in Bitcoin, Ether and EOS unwittingly gave their assets to a fraudulent crypto scheme called PLUSToken that got busted in June.
According to Wan, another myth is that Chinese investors are buying Bitcoin to hedge against the devaluation of the renminbi, the country’s national currency.
However, Wan says the average Chinese trader buys gold to hedge against the renminbi and buys crypto assets to engage in speculative trading or investing.