Bitcoin's rise in relations with Chinese businessmen in Russia: RMB detours Russia?

On August 6th, local time, NBC's well-known anchor "Shark Tank" Kevin O'Leary and Morgan Creek Digital's Anthony Panggliano (Anthony "Purp" Pompliano) had a TV discussion. As mentioned in the discussion, the recent price increase of Bitcoin may be caused by “China’s capital flight”.

Not long ago, the media disclosed the trading market for the escape – Russia.

What is the relationship between Bitcoin and the RMB?

On August 5, the RMB broke for the first time in 11 years, and Bitcoin also pulled up 7%. Some people think that the rise of Bitcoin is related to the Chinese buying heavily because of risk aversion.

In fact, there is no such targeted discussion in China. The domestic mainstream view is that the rise of Bitcoin is related to the global economic deterioration, including of course the escalation of the trade war. But the more important reason is the global interest rate cut.

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But on the other side of the ocean, the discussers solemnly linked and debated the rise in bitcoin and the depreciation of the renminbi. Forbes commentator Joseph Young said on Twitter:

I don't think there is enough data to support China's huge impact on capital inflows into Bitcoin, but in recent months, a large part of Tether's chain trading volume has come from China, which I think is a question worth considering.

Peter Schiff, chairman of the European Pacific Capital and gold lover, also said:

The US Consumer News and Consumer Channel (CNBC) is doing its utmost to trick its viewers into buying bitcoin. Although gold has always been a bigger market, CNBC has given Bitcoin more playing time. Chinese people will not use Bitcoin as a safe haven. Speculators are buying, and they bet that Chinese people will buy bitcoin as a safe haven.

If the Chinese really want to hedge the uncertainty of global finance, especially the devaluation of the renminbi, Tether (the issuing company of USDT) is an option, not a bitcoin. Bitcoin is a long-term hedge against some high net worth individuals.

Until recently, an article by foreign media revealed the situation of the Russian cryptocurrency market, and the path of the RMB bypassing Russia only surfaced.

A Russian journalist Anna Baidakova released a report on coindesk on July 30, saying that millions of cross-border cryptocurrency transactions in China and Russia are conducted through USDT every day.

The article interviewed the head of trading in the Russian cryptocurrency OTC market – anonymously Oleg. Oleg reveals some amazing information:

1. Every day, a Chinese businessman comes to his counter with a box full of cash and converts it into a cryptocurrency with a transaction amount of $3 million;

2. About 20% of the cryptocurrency of the transaction is Bitcoin, and the remaining 80% is USDT.

3. The daily cryptocurrency transactions of Chinese merchants at other OTC counters range from $10 million to $30 million.

The article also interviewed Maya Shakhnazarova, the head of the global currency of Firecoin, and she revealed some transaction details:

1. Chinese customers bring cash to inform the wallet address and deliver cash, the seller of the cryptocurrency enters the USDT to the wallet address;

2. Office buildings in the Russian capital Moscow, almost every building has such an OTC counter;

3. Chinese domestic RMB buyers use the WeChat payment, Alipay, etc. to purchase USDT through OTC payment through OTC payment and Alipay.

According to Anna Baidakova’s report, through the cryptocurrency transaction, Chinese domestic users have bypassed foreign exchange controls and realized the flow of capital into and out.

The article mentioned that Chinese businessmen in Russia played a big role in the middle of the bridge. They assist in this transaction through commercial foreign exchange quotas.

There is a message in the text that the Russian central bank has several local shopping centers in Russia with unregulated cash flows of up to $9.5 billion per month. Many Chinese businessmen do business in them, and their income is made through cryptocurrencies.

Based on this evidence, when the RMB exchange rate plummeted, some institutions in the United States began to discuss whether China's safe-haven assets purchased cryptocurrencies, which led to the price increase of cryptocurrencies.

Reference article:

Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King

Author: Mutual chain pulse Yuan Shang

This article is [inter-chain pulse] original, reproduced please indicate the source!

Editor's Note: The original title is "American Anchor, Bitcoin Rise, Relationship between Chinese Merchants and RMB Outflow in Russia"

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