The report said this could point towards the possibility of Chinese citizens using cryptocurrency to move their money out of the country. In the past, wealthy citizens have circumvented the limit through foreign investments in real estate and other assets.
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Chainalysis sells compliance and investigation software to businesses and governments. A stablecoin is a digital currency that is usually backed by another asset or group of assets in efforts to stabilize its value and limit volatility.
Tether claims to be pegged to the U. Stablecoins are useful for transferring large amounts of cryptocurrency because, in theory, the value of the cryptocurrency a person is moving bitcoin in china not see wild swings.
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Again, it's highly unlikely that all of this is capital flight," Chainalysis said in its report. Part of this activity can be explained by China-based miners converting their newly-minted coins into Tether and sending them to exchanges bitcoin in china, Chainalysis said.
Miners are people with specialized computers solving complex math problems to mint new cryptocurrency. When they solve this complex problem, miners are rewarded in cryptocurrency. But the report also found significant spikes in Tether movement on certain news events.
Firstly, in October, Chinese President Xi Jinping threw his backing behind blockchainthe technology that underpins many digital coins. Secondly, after a massive sell-off in mid-Marchthe price of bitcoin began to recover.
Are Bitcoin and Crypto Prices Totally Dependent On China?
It's possible that the economic tumult may have prompted some capital flight from China, though much of the Tether movement could have been East Asia-based cryptocurrency traders moving their holdings to international exchanges in order to trade at a time when cryptocurrency price volatility was high," Chainalysis said. Tether itself has been mired in controversy. Both companies have denied wrongdoing.
China has previously taken a hard stance on cryptocurrencies. InBeijing banned fundraising via cryptocurrencies known as initial coin offerings or ICOs and local exchanges.
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