- Chinese citizens are flocking to Hong Kong to buy crypto
- These crypto tourists are taking advantage of lax regulations on physical ‘crypto shops’ in the SAR
- China’s decade-long war on crypto is not affecting the desire to own crypto
Chinese citizens wanting to buy into the crypto space are hopping across the border to Hong Kong in order to take advantage of crypto ‘shops’, according to the Financial Times. The outlet interviewed the operators of bricks-and-mortar crypto sellers who reported that Chinese customers now make up more than 50% of their customer base, drawn by the more lax regulations compared to China’s strict anti-crypto policy. The development shows how the desire for crypto in China has not diminished despite the government’s desire to stamp it out, which should be a warning to the US.
Crypto Tourism on the Up
China has been on the crypto warpath since 2013, with the result that cryptocurrency transactions are prohibited on the mainland, where Beijing has also banned overseas exchanges from providing services to onshore clients via the Internet. However, in Hong Kong, crypto trading is legal, and the city aims to establish itself as a hub for digital asset trading.
This push has resulted in an upsurge of lightly regulated physical crypto shops, whose primary attraction lies in their ability to help customers purchase digital assets with cash, often without revealing the source of the funds or the customer’s identity. These stores are now thriving due to the increasing demand from visitors from mainland China and the uncertainty surrounding their regulatory status.
Warning to America
The reason for their popularity is simple, with the over-the-counter (OTC) crypto stores allowing customers to buy significant amounts of cryptocurrencies with fewer, and sometimes zero, verification procedures, in stark contrast to the stringent licensing regulations imposed on online exchanges in the country.
The Financial Times interviewed owners of these shops who all reported an uptick in footfall and particularly from mainland China, with some reporting that Chinese crypto tourists now account for more than 50% of their customer base.
The news that a decade’s worth of clamping down on crypto hasn’t dimmed the desire for Chinese citizens to get their hands on cryptocurrencies should be a warning to the likes of the US that banning something doesn’t eradicate the desire for it.
