USDT to Bypass FX Control in China

[stoneIsland]

Hi I have some family money wanted to transfer from China to US. Before for small amount it's possible but now due to COVID it's becoming impossible.

I noticed below news looks like people are using tether. Anyone has experience buying USDT in China then exchange to BTC then to USD in US? What's the transaction cost of doing this and is there any tax consequence for doing so?

https://www.coindesk.com/tether-usdt-russia-china-importers
https://www.financemagnates.com/cryptocurrency/news/tethers-red-dragon-why-usdt-is-dominating-chinese-markets/

[OcTradism]

P2P marketplaces can help you. There are some for you to choose but I advise you to choose LocalBitcoins or Paxful.

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Name

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KYC

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Social Media

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Supported Countries

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Payment methods

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Accepted currencies

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Withdrawal limit

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Scam Accusations

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LocalCryptos.com

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No

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Twitter

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LocalCoinSwap.com

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Optional

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Twitter

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Local.Bitcoin.com

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No

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Telegram

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LocalMonero.co

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No

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Mycelium.com

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No

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Paxful.com

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Yes

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300+

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HodlHodl.com

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No

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WallofCoins.com

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No

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Remitano.com

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buyers

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BuyCrypto.today

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Swapngo.org

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LiberalCoins

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Coinected.io

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BitQuick.co

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AgoraDesk.com

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BitValve.com

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RampInstant.network

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BuyCoins.africa

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African

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Totalcoin.io

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CoinCola

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Bitzlato.com

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WazirX.com

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Indian

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Moontrade

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No

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counter.network

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Optional

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Binance P2P

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Yes

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Twitter,

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Bank,

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100 BTC/day

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Facebook,

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Alipay,

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Instagram

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WeChat,

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QIWI

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Paxful: Either create a listing/ trading volume >1500$

I noticed below news looks like people are using tether. Anyone has experience buying USDT in China then exchange to BTC then to USD in US?

People like Tether USD because it is a stable coin. For money transfers, people like it because they can move money fastly with Tether USD on ERC20. Remember it is only faster on ERC20 (or TRC20) but it is not faster on OMNI layer. With OMNI layer transaction, its speed will nearly the same as when you move your fund with bitcoin.

I don't know where your idea comes from. You move your funds from your local money to BTC, then to USD, and don't have to use Tether USD. With P2P marketplaces you can do that fastly.

[stoneIsland]

I don't know where your idea comes from. You move your funds from your local money to BTC, then to USD, and don't have to use Tether USD. With P2P marketplaces you can do that fastly.

Thanks will check P2P market out. Wanted to use tether since want to avoid volatility of BTC during the transfer.

What's the reasonable premium of buying in P2P market vs exchange? That's would be the transaction cost. I would expect BTC or tether price higher in foreign exchange controlled countries like China or Argentina.

[mk4]

What's the reasonable premium of buying in P2P market vs exchange? That's would be the transaction cost. I would expect BTC or tether price higher in foreign exchange controlled countries like China or Argentina.

Great thing with P2P is that you can choose what price you want, because you yourself can set the buy offer(or of course, choose between other existing sell offers). It's just you might end up waiting a while to receive an offer. As for the price premiums, no idea on that.

[Pito001]

USDT is a nice option if both sides are familiar. Around 1 dollar fee for transaction and around 2-3% for cash-in cash-out

[OcTradism]

What's the reasonable premium of buying in P2P market vs exchange? That's would be the transaction cost. I would expect BTC or tether price higher in foreign exchange controlled countries like China or Argentina.

With P2P marketplaces, you can choose offers you like (mk4 told you already) and you can choose the marketplace that gives you cheapest fees for your trades (as I know, fees tend to be different for buyers and sellers. Usually fees are more expensive for sellers, and fees for buyers almost have free of fees with trades). For bank transfers, there are additional fees and determine by the bank you use to transfer your money.

Have free rights to choose offers and marketplaces, banks, etc. You will be almost get freedom on P2P marketplaces but be aware of scammers on such. Don't be attracted by any words, any promises from anyone to trade off Escrow. Don't release your bitcoin if you don't get your money from your trade partners.

[stoneIsland]

USDT is a nice option if both sides are familiar. Around 1 dollar fee for transaction and around 2-3% for cash-in cash-out

2-3% percent total cost for doing this sounds steep for me. If do this via BTC, what's would be reasonable cost? I guess the cost comes from the fact that btc price I buy in china will be higher than btc price I sell than exchange here in US.

[stoneIsland]

Great thing with P2P is that you can choose what price you want, because you yourself can set the buy offer(or of course, choose between other existing sell offers). It's just you might end up waiting a while to receive an offer. As for the price premiums, no idea on that.

Thanks for pointing this out. In this usage setting, I think the concern is not really the price of btc I buy at rather the price I buy in China vs I sell here at US. Ideally I would want buy/sell price is almost the same and the time between buy/sell is as short as possible so that I'm not exposed to bitcoin volatility. Recent btc volatility is relative low but I've been btc dropped 10%+ within 15min time frame.

A separate question, is there way for small user like me to hedge btc price risk in a short time frame? Let's say I buy 0.1 btc in China. I know takes 30 mins for trade to settle/escrow then transfer to US exchange. Within these 30 mins is there a cheap way for me to lock in the price of btc? One idea I have is use the Defi loan in Ethereum:

1. Buy 0.1 btc in China
2. Take out a defi loan and borrow 0.1 btc then sell those 0.1 btc immediately. Hopefully btc price at 1) and 2) are close. Hopefully interest rate is not that high. This is also part of the cost
3. Transfer btc to defi loan so that I repay the btc loan

Does this look practical?

[seoincorporation]

And why send it with Tether if you can receive bitcoins. If your family in china can buy some bitcoins you only need to give them the bitcoin address to receive them, easy as that. The Tether step is just an unnecessary step for the goal.

And if govs can track your BTC, then you should try with XMR better know as Monero.

[stoneIsland]

And why send it with Tether if you can receive bitcoins. If your family in china can buy some bitcoins you only need to give them the bitcoin address to receive them, easy as that. The Tether step is just an unnecessary step for the goal.

And if govs can track your BTC, then you should try with XMR better know as Monero.

The point of tether is to avoid bitcoin price risk. What if after I bought btc in china and before I sell in exchange in US btc drops 20%?

[mk4]

A separate question, is there way for small user like me to hedge btc price risk in a short time frame? Let's say I buy 0.1 btc in China. I know takes 30 mins for trade to settle/escrow then transfer to US exchange. Within these 30 mins is there a cheap way for me to lock in the price of btc? One idea I have is use the Defi loan in Ethereum:

...

Does this look practical?

You're over-complicating things with the "defi" route.

Simply buy the BTC, and when you have access to the BTC, simply withdraw the coins immediately to the US exchange. If you're going to send from an exchange, chances are, the withdrawal fees are going to be slightly on the higher side by default as to not take you too long to receive the coins.

[stoneIsland]

Simply buy the BTC, and when you have access to the BTC, simply withdraw the coins immediately to the US exchange. If you're going to send from an exchange, chances are, the withdrawal fees are going to be slightly on the higher side by default as to not take you too long to receive the coins.

How long would above step take? What if btc drop significantly like 10% during this process? It doesn't seem impossible for this scenario to happen.

[mk4]

How long would above step take? What if btc drop significantly like 10% during this process? It doesn't seem impossible for this scenario to happen.

How long the peer-to-peer transaction will take place probably depends on what platform you're going to use. As for the withdrawal fees, it will really depend on how congested the mempool[1] will be.

But yea, it's definitely not impossible for bitcoin to move higher/lower while you're doing the transaction, but you'd have to be quite unlucky for that to happen. Unfortunately that's simply one of the risks you have to take for transferring money using bitcoin.

[1] https://www.blockchain.com/charts/mempool-size

[ReiMomo]

Simply buy the BTC, and when you have access to the BTC, simply withdraw the coins immediately to the US exchange. If you're going to send from an exchange, chances are, the withdrawal fees are going to be slightly on the higher side by default as to not take you too long to receive the coins.

How long would above step take? What if btc drop significantly like 10% during this process? It doesn't seem impossible for this scenario to happen.

That's the nature of cryptocurrencies (volatility), but I don't think with an hour it will drop significantly to 10%.

I vouch for Paxful here, a peer to peer basis, if you didn't afraid to fill the KYC process they are good to go. You can visit the site and do the math for the transaction cost. Or chose the given local exchange site above.

Or read this, https://www.bitpremier.com/buy-bitcoins/china.

[Hueristic]

Why use a pegged shitcoin when you can use bitcoin? If you need fungibility and want lower fees and faster transaction times use Monero.

If you do use a shitcoin then don't hold it.

[gentlemand]

Are you or anyone in your family Chinese? I certainly would not want to do a P2P transaction there without a native speaker to hand. I presume trading in China takes place on completely different platform to what we're used to. They've had a long time to develop their own options that are safe from the great firewall.

[Kelvinid]

Don't make yourself complicated. We can think BTC is risk volatile and you are worried about that but you are in need to transfer your money, I don't think the cost is really important this time because the most important now is you can move your money (not unless if you do the sacrifice and pay taxes).

Using P2P exchange is the only option that could help you. USDT could be the best option even though the cost is high if you are afraid that the Bitcoin price will drop after you bought. You only have the choice, to buy crypto or stick into Fiat money.

[NotATether]

Simply buy the BTC, and when you have access to the BTC, simply withdraw the coins immediately to the US exchange. If you're going to send from an exchange, chances are, the withdrawal fees are going to be slightly on the higher side by default as to not take you too long to receive the coins.

How long would above step take? What if btc drop significantly like 10% during this process? It doesn't seem impossible for this scenario to happen.

In my experience it takes 2 or 3 hours to get enough confirmations for a single transaction to be considered accepted, depending on how many blocks are found at that time. So buying the BTC from China will be one transaction and sending it to an exchange address in the US will be another and the whole process should take about 4-6 hours. So far, in that timeframe, I haven't seen bitcoin's price move by more than a few hundred dollars.

[stoneIsland]

In my experience it takes 2 or 3 hours to get enough confirmations for a single transaction to be considered accepted, depending on how many blocks are found at that time. So buying the BTC from China will be one transaction and sending it to an exchange address in the US will be another and the whole process should take about 4-6 hours. So far, in that timeframe, I haven't seen bitcoin's price move by more than a few hundred dollars.

I think 4-6 hours is way too long to be exposed to btc price risk. Say it I transfer $10k USD and if price drop $200 then equivalent to loss of 2%. This is not trivial loss in terms of international money transfer.

[jademaxsuy]

USDT is already paired by USD and there is no need also to convert it to btc. However you need to do KYC of course knowing that it is all about money transfer and probably it involve high amount transaction.  In this case you need to secure also your account or wallet for your safetly like saving all important details of your account so when whenever you will forget pass you can easily remember it with your back up.

Aside from that two way factor also must be activates in any case your account will be compromised. It will take hard time for the hacker to transfer crypto in your wallet.