How to Buy Cryptocurrency in China
In terms of technology and innovation, China has always been on the forefront of things. They have always had the most number of startups and products coming out at affordable and reliable prices. The one place that the country beefed up its regulatory power, was with the cryptocurrency market and its surrounding industry.
At one point, buying, storing and selling cryptocurrencies in China was an easy affair. Many of the world’s leading cryptocurrency exchanges were based out of the mainland and had a decent native trade volume on their platforms. But come 2017, the government of China banned cryptocurrency trading and enforced a blanket ban on the market.
Initially, the market suffered because a large number of global exchanges were headquartered in the country. But with time and with space to let the ban play out, people have found their way around the ban. The first thing that happened was that the exchanges shifted their headquarters to Hong Kong. Followed shortly by a change in their banks.
Hong Kong has more favourable rules and regulations for business owners and startups. So it was a natural first choice for the industry. And now, Hong Kong is the home of a lot of cutting-edge blockchain innovation, not to mention the headquarters of many, many globally operating exchanges.
But the people in China still can’t use a lot of these exchanges. As, on the mainland, they are still banned. So how does the average Chinese investor access the cryptocurrency market? How does a newbie enter it?
The Chinese Work Around
Since established exchanges have moved bases because of the ban, the Chinese were in need of a work around to; a) still be a part of the market and b) adhere to national ban. And so, exactly that they did.
The average Chinese investor now uses a P2P platform or an OTC exchange to buy, store and sell bitcoins and other altcoins. The only difference between an exchange and a P2P platform, other than the fact that the former of the two is banned, is that these platforms do have a centralisation element to their transactions.
In a P2P network or platform, the seller posts a sale with a price, the buyer directly pays through whichever mode they wish and takes over the digital asset. In most of these P2P networks/platforms in China, the most common way of paying the seller are the following:
- Credit or Debit Card
Here is a list of
Top 4 most commonly used P2P platforms in China.
LocalBitcoins is a P2P platform that allows the exchange of Bitcoin and other altcoins in exchange for local currencies. LocalBitcoins is headquartered in Helsinki, Finland. And localBitcoins is a very commonly used platform by both sellers and buyers of cryptocurrency in China.
Paxful is another P2P platform that allows users to sell Bitcoin for money. An interesting feature that Paxful has is that it offers over 300 ways to pay for Bitcoins. Some of them include Amazon Giftcards, cash deposits, etc.
Coinmama is a P2P platform-exchange hybrid. It facilitates OTC trade of Bitcoins and is very efficient. It accepts payment through credit cards, debit cards and also offline cash handovers. But every transaction using a card, the platform levies a 6% fee.
CEX.io is similar to the other ones listed above. Users can get and sell Bitcoins and other altcoins on the platform. And the platform accepts transfers, card payments, etc. The only difference being that when a credit card payment is made, the access to the Bitcoin or altcoin bought is handed over immediately.