Over $50 billion worth of cryptocurrency has moved out of China-based wallets to other parts of the world last year, suggesting Chinese investors could be transferring more money than allowed out of the country.

According to CNBC, Chinese citizens can only buy up to $50,000 worth of foreign currency per year at financial institutions, and in the past the restriction was circumvented through foreign investments in real estate and other assets The government has, however, cracked down on these methods.

Blockchain forensics firm Chainalysis published a report detailing that cryptocurrency, particularly stablecoins, could now be filling in the gap, as while not all of the $50 billion moved out of China-based wallets are capital flight, the figure can be seen as an “absolute ceiling for capital flight via cryptocurrency from East Asia to other regions.

Chainalysis’ report reads:

Over the last twelve months, with China’s economy suffering due to trade wars and devaluation of the yuan at different points, we’ve seen over $50 billion worth of cryptocurrency move from China-based addresses to overseas addresses.

The stablecoin mostly being used is said to be Tether’s USDT, which is pegged 1:1 with the U.S. dollar. It would be useful to transfer large amounts of USDT, as being a stablecoin means it won’t be subject to wild price swings some other cryptocurrencies go through.

Some of the activity can, per Chainalysis, be explained by cryptocurrency miners based in China converting newly minted crypto into USDT, and sending the funds into exchanges abroad. Chainalysis said:

In total, over $18 billion worth of Tether has moved from East Asia addresses to those based in other regions over the last 12 months. Again, it’s highly unlikely that all of this is capital flight.

The report also found significant spikes in the movement of USDT, based on certain events. In October, when Chinese President Xi Jinping backed blockchain technology, and amid March’s massive sell-off, capital flight seemingly rose.

The blockchain forensics firm added that some of that movement could have been East Asia-based cryptocurrency traders moving their holdings to exchanges, in order to take advantage of volatile times.

It’s worth noting that China has in the past cracked down on cryptocurrencies. In 2017 the country banned fundraisers via initial coin offerings (ICOs) and cryptocurrency exchanges from operating in the country.

Featured image via Pixabay.