$50B Worth of Crypto, Mainly Tether, Are Used for Capital Flight Out of China: Chainalysis

2020-8-21 17:48

Blockchain analytic firm, Chainalysis, has released a new research report which indicates that crypto assets estimated at approximately $50 billion have been sent to other destinations around the world from China.

The research notes that this is a clear indication that Chinese crypto investors are running away from the strict and punitive regulations which limit the amount of capital they are supposed to transfer from the country.

According to the research, USDT accounts for over $18 billion of the crypto assets outflow from the East Asia region within the period under study. The stablecoin, which is pegged to the US dollar, is the most popular stablecoin in the region accounting for 93% usage among stablecoins. The report explains:

“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.”

Under the Chinese rules, citizens are prohibited from moving more than $50,000 out of the country per year. To circumvent this rule, wealthy Chinese mostly invest in real estate overseas as well as creating shell companies. However, the report does not indicate the percentage of the $50 billion amounts to capital freight.

The report notes that USDT has in the recent past replaced the US dollar for a vast majority of Chinese people. Majority of merchants and traders in China are now accepting the stablecoin, especially those dealing with overseas businesses.

Speaking to Chainalysis, Tether’s chief technology officer, Paolo Ardoino, explained that the uses of the stablecoin are fast evolving. He stated that USDT offers fast settlement, low charges, high liquidity creating various opportunities for lending products, crypto traders as well as safe havens for individuals in nations with unstable fiat money.

The report also found that more Chinese companies conducting business in the Americas and Europe now accept Tether and Bitcoin as means of payment.

The report also states that high crypto outflow from China can also be attributed to high Bitcoin mining as miners are quick to sell the gained coins to other parts of the world.

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china crypto chainalysis billion estimated assets approximately

Источник: bitcoinexchangeguide.com

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