As Bitcoin continued its resurgence over the past week, over-the-counter (OTC) trade deals in Chinese Yuan (CNY) have also been surging, even at disadvantageous conversion rates.
The latest data indicates an increasing demand for the stablecoin Tether (USDT) on OTC trading desks against the Chinese Yuan. At the same time, the price quoted for the USD-pegged stablecoin is being offered at a premium of over four percent.
USDT a Gateway for Chinese Capital?
Nonetheless, Chinese traders are seemingly eager to pay 7 CNY for 1 USDT (although 1 USD = 6.7 CNY), in order to enter the cryptocurrency markets. In China, due to the ban imposed on cryptocurrency trading in 2017, investors look for ways to circumvent this rule by buying or selling cryptocurrencies either through peer-to-peer (P2P) services or over-the-counter (OTC) markets.After acquiring USDT through an OTC exchange, investors will generally use VPN solutions to enter cryptocurrency exchanges and engage in trading digital currencies. The rise in the trading premium for USDT against CNY suggests that the demand for cryptocurrencies is high enough to push conversion rates up.1/ Chinese markets reveal strong buys. OTC (Over-The-Counter) trades, the almost only way to buy bitcoin with fiat in China, showing considerable $ premium (1 USDT = 7 CNY) over the official rate of 1 USD = 6.7 CNY. pic.twitter.com/bd0n0DGFVU
— cnLedger (@cnLedger) April 8, 2019
How Will Chinese Authorities React?
As the cryptocurrency market is showing signs of revival, it’s bound to attract the attention of investors that are waiting for an opportunity to invest in the digital currency market. BeInCrypto has previously reported on the resurgence of Chinese stocks and the potential scenario where stock trading profits start flowing into the cryptocurrency industry next.
Image courtesy of Twitter, Shutterstock.
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