How is the Air Travel Industry Affected by Bitcoin in China?
According to the Immediate Profit system website, since China declared ICO illegal and shut down cryptocurrency exchanges, Chinese Bitcoin trading volume has shifted to OTC markets. But the transaction volume of OTC markets is still tiny compared to on-exchange volume. This article will introduce you to some strategies of the Chinese government’s regulation on Bitcoin and how it affects the air travel industry in China.
7 Ways that Bitcoin can Benefit the Air Travel Industry of China
- Traveling on bitcoin and the air travel industry mutually benefits each other
With the rise of bitcoin prices, more and more people have become familiar with blockchain technology and are interested in using bitcoin as a currency.
Moreover, the number of Chinese users is growing tremendously because China’s political environment has been somewhat unstable recently, such as the yuan depreciating continuously, frequent security breaches, the stock market moving unpredictably, etc. As a result, some Chinese even treat bitcoin as a haven asset.
However, this also means that people prefer to keep their money in bitcoin instead of fiat currencies for different reasons. For example, if they seriously expect the yuan to collapse one day, there is no place to easily exchange bitcoin with fiat currencies.
The rapid development of blockchain technology and its lower transactions fee than traditional payment methods enable bitcoin to be one of the best choices for air travelers. For example, they can buy in-flight rent cars at the airport with bitcoin when landing without withdrawing fiat currencies from their wallets.
They can also transfer fiat currencies from the bitcoin ecosystem without going through a bank. In this way, the transaction volume of the whole industry increases, and the profit increases as well for both suppliers and aeroplanes manufacturers.
- Regulations on BTC exchanges do not affect OTC markets
China has been heavily regulating cryptocurrency exchanges since September 2017, while there is still no strict regulation on OTC markets. Some say it’s because Beijing is planning to make an OTC market and issue a virtual currency, while others believe it’s because the government has not found an efficient method yet.
Regardless of the reason, you can see that Chinese bitcoin trading volume has been shifting to OTC markets since restrictions on exchanges. Moreover, as most OTC brokers are running anonymously, Chinese investors can still purchase bitcoin at any time without worrying about the effects of regulations that much.
- Domestic air travel industry negatively affected by China’s new visa law
China has been intensifying its management of foreigners visiting China since September 2017. As a result, the government requires a stricter verification process for foreigners, and the number of business travelers and tourists has been decreasing steadily.
With less foreign money coming into China, the air travel industry is bound to be affected since it’s an import-export industry.
- Regulations on exchanges and OTC markets have stimulated Chinese Investors’ creativity
After September 2017, when OTC transactions became popular in China, people always pointed out precarious transactions.
However, Chinese bitcoin exchanges have created new services like over-the-counter (OTC) trading platforms to make it more secure for investors to trade on OTC markets.
Some companies even release their cryptocurrency with higher transaction speed and lower fees exactly to compete with fiat currencies in this regard.
- Bitcoin helps Chinese tourists to save money when traveling abroad
Chinese tourists have been actively purchasing bitcoin before going on a trip. They know that foreign exchange rates are always not in their favor and ordinary payment methods like credit cards usually charge higher fees.
Some Negatives of Bitcoin that can Affect the Air Travel Industry in China:
1.) Bitcoin is not yet regulated by the government, making it impossible to regulate digital currencies.
2.) Bitcoin’s price fluctuates too much over a short period, making people who own a large number of cryptocurrencies worried about its value even during their trip.
- travel suppliers do not widely accept) Bitcoin in China. If people want to use it when traveling, they have no choice but to purchase bitcoin before their trip. This is why some Chinese citizens are promoting the usage of bitcoin when traveling.
Bitcoin has both positive and negative effects on China’s air travel industry, but the government’s regulations have a more significant influence. If China ever makes a virtual currency, it will probably become more influential than bitcoin in this industry.