China Embraces Blockchain Technology As CNY BTC Trades Less Than 1% Of Global Crypto Trading

  • China’s National Audit Office & Ant Financial is leveraging blockchain technology
  • China’s central bank crackdown on cryptocurrencies has resulted in the Chinese yuan (CNY) accounting for less than 1% of global Bitcoin (BTC) trading.

China’s central financial institution, the People’s Bank of China (PBoC), recently announced that the Chinese yuan (CNY) is now used in less than one percent of the world’s total Bitcoin (BTC) trading. According to CryptoCompare data in September 2017, CNY BTC trading accounted for over 90 percent of global bitcoin trades. In order to reduce the number of bitcoin transactions involving the Renminbi, the Chinese government moved toward banning cryptocurrency purchases using fiat currencies.

CryptoCompare BTC CNY Bitcoin TradingSource: CryptoCompare

Moreover, authorities in China placed travel restrictions on employees of crypto exchange Huobi and OKCoin. Both these exchanges had one of the highest crypto trading volumes in China at the time. Additionally, 85 initial coin offerings (ICOs) and 88 local cryptocurrency exchanges, which constituted the majority of China’s crypto economy, have now shut down. Due to the government-imposed restrictions, Huobi shifted its operations to Singapore, a country offering a more favourable crypto environment.

Meanwhile, OKCoin, now known as OKEx, has moved its headquarters from China to crypto-friendly Malta. Cryptocurrency exchange Binance, whose Q1 2018 profits exceeded that of Deutsche bank, Germany’s largest financial institution, also shifted its operations from mainland China to Malta due to regulatory pressure.

$1 Billion In Chinese ICO Investments Returned To Investors

During its nation-wide crypto crackdown, the Chinese government labeled ICOs as an “illegal public financ[ing]” method. ICOs were accused by the country’s authorities of aiding in money laundering and other types of illicit activities, including the issuance of fraudulent and illegal securities. According to a September 22nd, 2017 report by Xinhua news, approximately $1 billion worth of investments in 43 different ICO projects were given back to investors after a government-led crackdown on local crypto-related startups.

Chinese authorities widened the scope of their cryptocurrency ban in February by prohibiting the nation’s residents from trading and acquiring digital currencies through exchanges located in countries outside of China. The heavy restrictions placed by the Chinese government have also led to giant cryptocurrency mining company Bitmain shifting its headquarters from mainland China to Singapore. Bitmain has now established its mining operations in the United States and Canada as well.

Although China’s government has been critical of cryptocurrencies, it has praised and adopted blockchain technology in a number of its routine operations. For instance, the Chinese government’s National Audit Office is reportedly planning to implement a blockchain-based solution for its existing data infrastructure. Billionaire Jack Ma, founder of giant online retail company Alibaba, has also been a strong supporter of blockchain technology, while referring to Bitcoin and other cryptocurrencies as merely a “bubble.” Notably, Ma’s Ant Financial company introduced a blockchain-powered money transfer service on Monday, which is now sending digital payments from Hong Kong to the Philippines.

Crypto Startup Launches Bitcoin Term Deposit Offering 9% Annual Interest

Francisco Memoria

A Delaware-based cryptocurrency startup called BitLeague has recently launched a Bitcoin term deposit product designed to bring mainstream-like services to the crypto economy and attract new users.

The move was announced at Consensus 2019 and, according to a press release, the term deposit will offer 9% annual interest, with a lock-in period of 3 to 36 months. Adnan Gilani, the company’s president, was quoted as saying:

Our mission is to create a more equal, open financial platform, which brings more benefits to users, grows their wealth, and provides more liquidity to the system. The commercial bank only pays about 2% for one year Certificate of Deposit, we offer 9% fixed rate, this is how we add value to our clients.

The move highlights a new trend in the cryptocurrency space that has been seeing firms launch new products that allow users to earn interest on their cryptocurrency holdings. Crypto lending firm BlockFi, for example, has launched a cryptocurrency deposit account offering users over 6% a year in compound interest.

Nexo, a Switzerland-based startup, has also been offering users ‘instant’ cryptocurrency-backed loans, offering investors up to 6.5% interest on stablecoins. Similarly, cryptocurrency wallet Cobo offers options that let users earn income on their crypto holdings.

BitLeague itself is set to also launch a zero-commission trading service in 14 states in the United States, with the goal of helping “people to adopt bitcoin, the next generation sound currency for everyone.”

The firm’s products are notably hitting the market at a time in which bitcoin, the flagship cryptocurrency, is seeing its price surge. According to CryptoCompare data, BTC is now trading over the $8,000 mark, after rising 49% in  the last two weeks.