Ben Zhou, CEO of Bybit, has confirmed that the cryptocurrency exchange will not be supporting yuan trading in the foreseeable future. In a media briefing on December 3, Zhou emphasized the platform’s stance to stay clear of facilitating capital outflow, which is a major concern for the Chinese government. However, he revealed that Chinese citizens could still engage in crypto trading through the platform by using a Virtual Private Network (VPN) to access it from overseas or other regions.
Despite the lack of yuan support, Bybit has taken measures to accommodate Chinese users who live abroad by allowing them to register using mainland China identity documents such as national IDs and passports. This move, however, comes with the caveat that Bybit continues to block IP addresses originating from China to comply with local regulations.
Zhou highlighted that mainland Chinese residents could circumvent the government’s stringent ban on cryptocurrency trading by using VPN services to appear as if they are accessing the internet from outside China. This method provides a loophole for those residing within the country, albeit Bybit has noted only a modest uptake from this demographic.
User Growth and Market Strategy
In 2023, Bybit saw a dramatic increase in its user base, with 40 million new users joining the platform, elevating the total to nearly 60 million. This represents a nearly 300% increase from the previous year’s count of 20 million registered users. The substantial growth underscores Bybit’s expanding influence in the global crypto market, despite regulatory challenges in various regions, including China.
Looking ahead, Zhou disclosed plans for Bybit to reapply for a Hong Kong license in the first quarter of the next year. The firm had initially applied for a license in January but withdrew its application in May. This decision aligns with the Chinese government’s approach to allow Hong Kong to expand its cryptocurrency industry while maintaining a prohibition on crypto trading within the mainland—a policy in place since 2021.
Despite the mainland ban, the Chinese cryptocurrency market remains active, with nearly $50 billion processed in transactions from July 2023 to June 2024, according to data from Chainalysis. This vibrant activity indicates a continued interest and engagement in cryptocurrency trading among Chinese traders, albeit under significant regulatory constraints.
| Year | Total Users | Significant Regulatory Actions |
|---|---|---|
| 2022 | 20 million | – |
| 2023 | 60 million | Application and withdrawal of HK license |
| 2024 | Planned | Reapplication for HK license in Q1 |
The situation with Bybit and the broader Chinese cryptocurrency market exemplifies the complex dance between innovation, regulation, and geopolitics. While the Chinese government enforces a strict ban on crypto trading within its borders, the persistence of a thriving market through alternative means such as VPNs highlights the indomitable spirit of the crypto community. This scenario also underscores the challenge for exchanges like Bybit in balancing compliance with innovative solutions to meet market demand. As the global landscape of cryptocurrency regulation continues to evolve, the ability of platforms to adapt while respecting local laws will likely dictate their success and influence in the international financial arena.
Featured image credit: faungg’s photos via Flickr
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