China still holds the title of the largest cryptocurrency market in East Asia, with total transactions of over US$220 billion for the period between June 2021 and July 2022.
The sheer amount of transactions was staggering despite the crackdown by Beijing against mining and trading of the digital currency, a report said.
The June 2021-July 2022 performance had surpassed Japan and South Korea for the period, said the South China Morning Post quoting Chainalysis.
Circumvent The Great Firewall
Before China decided to clamp down on digital assets in 2021, the country was in the vortex of the crypto world. The free environment spawned big exchanges among bitcoin mining companies, including Binance Holdings.
Eventually, Beijing, in Sept. 2021, declared all cryptocurrency transactions illegal.
The move dampened the enthusiasm among big crypto industry players, sending all players shivers. Many have thought the booming domestic crypto industry would die.
With the Great Firewall, a digital firewall erected in the 1990s, Beijing appeared to have succeeded. But bitcoin traders have found their redemption in virtual private networks (VPN).
By using VPNs, traders and miners of the digital assets could circumvent the Great Firewall, Zennon Kapron, fintech consultancy Kapronasia founder, said.
Bitcoin traders, at least some of them, persisted on a smaller scale, he said.
Skirt The Regulations
China phased out the trading of crypto in 2013. It also banned digital tokens in May 2021.
The price of Bitcoin nosedived by more than $2,000 (£1,460) during the Chinese announcement, the BBC reports.
The Draconian regulations, however, failed to dampen the growth of the domestic industry. Many went underground to skit the regulations imposed by the government.
Banned by the government, traders and miners found comfort online.
Two of China's special administrative regions, Macau and Hong Kong, also benefited from the windfall. Both regions ranked seventh and fifth in East Asia in terms of transactions.
31% Decrease
Although China is still in the top spot in East Asia, domestically, the crypto industry is reeling from the clampdown.
Total transactions in mainland China dipped by 31 percent for the same period last year. The dismal performance had dragged East Asia on the total year-on-year growth to only 4 percent, which was the poorest performance worldwide.
The main reason for the decline was the reduced cryptocurrency in China, South China Morning Post quoted a report.
Schemes to Shield Crypto
The country's central bank, the People's Bank of China, announced last month it had succeeded in clamping down on crypto-related transactions.
The announcement did not make a dent in the resolve of traders and miners to shield the crypto and weather the attack in time.
A manager of QuantBlock, a blockchain advisory company, blockchain and crypto advocates in China had devised schemes to keep their activities beyond the radar of government regulators.
The enthusiasm in the domestic crypto industry remains high despite the crackdown, Yip Ki-nang, manager of QuantBlock, said.
During the crackdown, China has emerged again as the largest bitcoin mining hub in East Asia, the report released in May by Cambridge Center for Alternative Finance (CCAF) said.
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