The Chinese government has formally banned cryptocurrency for years, but that hasn’t stopped many of its citizens from trading it anyway—so much so that Chinese investors can influence the crypto markets. The latest example is Tether, whose USDT stablecoin is pegged to the dollar but has recently traded at a small discount. The reason, some economists say, is that Chinese investors have cooled to crypto and are instead seeking to plow their money into the country’s stock market.
USDT has been consistently trading below the price of the U.S. dollar since late September, according to CoinMarketCap. The decline is very slight—last Tuesday, Tether was trading at $0.9995 to the dollar—but the dip does point to a push to dump the stablecoin for yuan and to invest in Chinese stocks, which have surged as a result of the state’s recent stimulus efforts. The 3% to 5% fee to liquidate USDT hasn’t seemed to deter investors who stand to benefit significantly if the Chinese stock market continues to soar the way it has been.
