$50 Billion in Crypto Transferred outside China in 2019

Chinese nationals might be inclined towards Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term to transfer their money outside the country as Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term analytics firm, Chainalysis found out that around $50 billion in digital currencies left China last year.

On a report published on Thursday, the New York-headquartered firm detailed that most of the transactions were made in stablecoins, whereas Tether alone accounted for $18 billion of the outflows.

“Stablecoins like Tether are particularly useful for capital flight, as their USD-pegged value means users selling off large amounts in exchange for their fiat currency of choice can rest assured that it's unlikely to lose its value as they seek a buyer,” Chianalysis stated in the report.

Indeed, Tether has always remained popular in China following the communist government’s ban on crypto trading platforms in 2017. Traders often head to over-the-counter (OTC) desks to get their hands on stablecoins, usually Tether, and transfer them to crypto exchanges for trading. Given the demand, the stablecoin is even sold at a premium price in the Chinese market.

China limits the yearly outflow of yuan outside to the country to only $50,000. This forces the wealthy nationals to invest in overseas real estate or create shell companies to circumvent the rules, and now crypto is turning out to be a much easier option.

However, the blockchain analytics firm did not confirm if the outflow of digital currencies from the region were used for moving capital outside.

Popular, Yet Controversial

Tether gained popularity as many crypto exchanges adopted this US dollar-pegged crypto to offer fiat-like trading experience. Although, the company itself was riddled with controversies.

For many years, Tether faced allegations of not maintaining a one-to-one USD chest to back its cryptocurrencies, but the company never conducted any transparent audit. Moreover, due to its ties with Bitfinex, both the companies are facing lawsuits for manipulating Bitcoin prices.

The companies are even fighting the state of New York for an allegedly illegal coverup of Bitfinex losses and a few other charges.