On Feb. 12, I wrote about moving money internationally, covering the options available to me. Here I want to relate my experience using the BTC-China exchange, which I had not used before.
Things have changed a lot in the Bitcoin world in the last two weeks, as you probably know. Prices against the dollar took a real tumble after Mt. Gox appeared to be terminal, but have rebounded in just the last two days.
Also, BTC-China was accepting direct transfers from Chinese bank accounts into its corporate bank account two weeks ago, but no longer. So, that part of my previous article is already out of date. Now, BTC-China has a voucher arrangement with a partner website. www.yijingdong.com. This same website also handles online game “money” exchanges. It seems BTC-China is using this system as a way around the government banning banks from dealing in Bitcoin.
Well, today was payday for me here in China, so I went ahead and bought bitcoins at BTC-China using this new voucher system. I wanted to find out whether it was any better than the other methods I described in my Feb. 12 blog to send money to my American bank.
Here’s the short version. It was easier than using the Ripple network as an intermediate step, but in some ways slower. It was comparable to using two PayPal accounts in China and the USA to transfer funds, but much cheaper. In fact, because Bitcoin prices rose during the day, my net deposit, even after fees, was $25 more than my withdrawal — a 10% gain.
Since most of you are probably not Chinese residents, the rest of this article may not be so useful to you. But I hope you’ll stick around anyway.
To use the BTC-China/Yijingdong voucher system, you have to have a Chinese bank account with online banking enabled. There are no other fiat currencies offered there beside Chinese New Yuan (CNY), also known as renminbi (RMB). So, this leaves out just about everyone outside China.
The process to buy Bitcoin is very easy on the BTC-China website, given the above restrictions. Click on the choice indicated below.
This takes you to the Yijingdong home page, where there is a prominent BTC-China voucher link. Right below that is the English option, a thoughtful service which no other Chinese Bitcoin exchange offers as yet. Clicking on the English option brings you to a form where you fill in the amount of CNY you want to spend, the name of your Chinese bank, your BTC-China username and your (Chinese) cellphone number.
Clicking “NEXT” brings up your online banking website, where you complete the necessary information to confirm the purchase. After that’s done, when you return to the BTC-China website you’ll find your CNY balance has immediately been credited.
I chose to buy some Bitcoin, keep a fraction in the BTC-China offline wallet called Picasso, and transfer the rest to my Coinbase account for deposit in my US bank account. This was not immediate, as I discovered.
I initiated both transfers around 11:30 am. They were not completed until nearly three hours later, because BTC-China checks each withdrawal manually for new accounts like mine. Coinbase acknowledged receipt at 2:30 pm, and the Picasso wallet transfer occurred just before 3 pm. In contrast, when I used the more complicated CNY-to-Ripple-to-Bitcoin method two weeks ago, the transfers were only delayed by the usual blockchain confirmation waiting time.
On the bright side, I was able to take advantage of arbitrage, as the Bitcoin USD exchange rate at Coinbase was slightly higher than at BTC-China. And, by the time I got to my Coinbase account at the end of the work day, Bitcoin values had risen, so my net deposit to my American bank, even after transaction fees, was $25 more than my withdrawal from BTC-China. Final credit in my bank account will be in two business days.
BTC-China has dropped its transaction fees from 3% to 1% in the aftermath of the Mt. Gox debacle. Additionally, they waive the fees for limit orders (such as mine) and rebate those fees back to the market maker as a reward for helping exchanges move more smoothly. Market orders get no such rebates, but 1% is still minimal.
Would I transfer money again with this method? Yes, if Bitcoin prices were rising against the dollar. If Bitcoin was in decline, as it was a few days ago, I would have used my usual China PayPal-US PayPal route described in my Feb. 12 blog. The PayPal method requires four days total from withdrawal to final credit in my bank account, but the CNY-USD exchange rate is far less volatile than Bitcoin rates, especially lately.
Although many of you can’t benefit from using BTC-China, I hope this article was at least informative. Thanks for reading to the end!