Investors from China are putting significant sums into cryptocurrencies despite official restrictions on digital assets in the country. In light of this, Chinese authorities are planning to amend anti-money laundering (AML) regulations to include all crypto transactions.
The Kyros Ventures report showed that despite strict restrictions from the Chinese government, local crypto investors own more digital assets than investors from other Asian countries.
89% of PRC investors use CEXs to buy cryptocurrencies. Dominant assets in portfolios of Chinese investors are stablecoins, which account for about 33.3%. At the same time, Chinese investors rarely make long-term investments. More than 70% of them prefer to make a quick profit by reselling assets.
The report also noted that the main sources of information for Chinese investors were the media in 2023. Over 70% of Chinese got information about the crypto market from news sources. Moreover, 80% of Chinese made investment decisions based on recommendations from family and friends.
The growing level of crypto usage in China increased the interest of local officials in the industry. Authorities are being asked to promote more control over the crypto industry in the country. According to a report in the local media, Li Qiang, Premier of the State Council of the PRC, held an executive meeting. It was decided to revise the anti-money laundering (AML) law to include control over all crypto transactions. Amendments to the law are expected to be drafted and introduced within a year, and the new rules are expected to take effect from 2025.
China introduced a complete ban on the use of cryptocurrencies in 2021. Its authorities are actively developing a central bank digital currency (CBDC). The Chinese government also has ambitious plans to develop the local Metaverse industry and to control users of virtual space.
