Just over a week ago, China renewed its hostility towards the cryptocurrency industry as it declared all cryptocurrency transactions within its jurisdiction to be “illegal.”
This new regulation, although it has had some negative effects on the price of the leading digital asset, Bitcoin, along with other cryptocurrencies in the market, the winners in the current move away appear to be the decentralized finance (DeFi) sector.
Central exchanges out of work
Since the new ban was announced, central exchanges such as Binance and Huobi, two of the largest cryptocurrency exchanges operating in the country, have either been forced to suspend or limit their operations in the Asian country.
we mentioned The Czechoslovakian-led exchange, Binance, announced that it had stopped operating in the country since 2017, while Huobi stopped allowing traders from mainland China to register new accounts.
Assets typically flow within a region, likely due to the preferences of local exchanges, but flows between regions often occur as a result of regulatory concerns, geopolitical changes, or significant changes in market prices.
A new Chainalysis report also hinted that crypto holders and traders in East Asia are moving their digital currencies in response to the regulatory crackdown. With the two largest centralized exchanges in the region going out of business, decentralized exchanges like Uniswap, dydx, etc. have seen an increase in their use.
DEXs are profitable
In another of our reports, we advertiser Regulatory pressure in China has forced the country’s crypto community to learn how to use DeFi.
This view was confirmed by Colin Wu, a prominent Chinese crypto journalist who predicted that “a large number of Chinese users will flock to the world of DeFi, and the number of users of MetaMask and dYdX will increase exponentially.”
This is already seen as data From the token terminal in the past seven days, the daily revenue from DEXs has also increased exponentially. Apart from that, the original tokens of these exchanges also rose in tandem during this period with some up as much as 37 percent while some like dydx reached new ATHs.
ad: Up to 20x margin on FTX.
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