According to a new report, more than $ 50 billion in cryptocurrencies have been transferred from China-based digital wallets to other parts of the world in the past year, as Chinese investors are likely to transfer more money than allowed.
Chinese citizens are allowed to buy up to $ 50,000 in foreign currency a year through financial institutions. In the past, wealthy citizens have bypassed the threshold through foreign investment in real estate and other assets. However, the government has abolished these methods.
"In the last twelve months, with China's economy suffering from trade wars and the devaluation of the yuan, we have seen more than $ 50 billion in cryptocurrencies moving from China-based addresses to overseas addresses," Chainalysis said.
Cryptocurrency holders use the controversial stablecoin Tether to move their money. Stablecoin is a digital currency that is usually backed by another asset or group of assets, in an effort to stabilize value and reduce volatility. Tether claims to be pegged to the US dollar.
Fixed currencies are useful for carrying large amounts of cryptocurrencies because, in theory, the value of the currencies in circulation is not expected to change significantly.
Part of this activity can be explained by "miners" based in China, who convert their coins into Tether and send them abroad. "Miners" are people with specialized computers who solve complex mathematical problems to create new cryptocurrencies.
With information from cnbc.com