According to a report by Reuters, local governments in China are selling the cryptocurrencies they seize despite the ban. These sales are carried out in offshore markets to avoid government surveillance.
Local governments in China are selling large amounts of cryptocurrencies despite the country’s ban on cryptocurrency trading and crypto exchanges. Speaking to Reuters, lawyers reported that authorities in China started selling the cryptocurrencies they seized by taking advantage of the lack of rules in the country. China’s local governments are filling their coffers with inconsistent and non-transparent approaches.
In a report based on transactions and court filings, Reuters stated that Chinese local governments sold their cryptocurrencies for cash and cashed out $1.4 billion worth of cryptocurrencies by the end of 2023. According to the report, local governments hold 15,000 Bitcoin.
Bitcoin and Cryptocurrency Spotlight in China
Bitbo reported that China holds 194,000 BTC worth about $16 billion, making it the largest BTC holder after the US.
Chen Shi, a professor at Zhongnan University of Economics and Law, stated that the cryptocurrency sales carried out by local governments in China do not comply with the current ban in the country and that these sales are a temporary solution.
Shenzhen-based lawyer Guo Zhihao stated that the Central Bank of China is in a better position to evaluate seized digital assets and should create a reserve from these resources. Ru Haiyang, co-CEO of Hong Kong-based cryptocurrency exchange HashKey, said China should follow the steps taken by the US and create a crypto reserve.
In the midst of the reserve debate, it is noteworthy that local governments in China own 15,000 Bitcoin. It is thought that the governments, which have so far cashed out cryptocurrencies, can sell 15,000 Bitcoin at any time.
The trade war between the US and China had pushed local governments to seek cash generation.
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