Analysts state that Chinese banks are struggling under the weight of their bad loans, and in response, the public is turning towards alternative payment methods such as bitcoin. Four banks have been quietly nationalized over the last few years, they are Baoshang Bank, Bank of Jinzhou, and Heng Feng bank.
It’s possible that the economic uncertainty in the country is what is pushing people to explore alternative payment methods such as bitcoin, which is in spite of a total cryptocurrency ban from its largest instant messaging program WeChat and rival WePay.
Nevertheless, bitcoin was easily able to reach an all-time high despite being banned in the country, with transactions carried out by peer to peer vendors as cash sales. The chart below shows the organic growth of bitcoin purchases in the country of 1.3 billion people.
The growth of the cryptocurrency market in China, however, does not stop at the secondary bitcoin market. In the middle of this year, the Chinese central bank said that it would launch a state-backed cryptocurrency and issue it to the country's largest companies such as Alibaba and Tencent. The companies involved in the deal will be responsible for dispersing the currency to Chinese citizens in CNY.