Preface: Recently, many friends from other industries have been asking about forex-related issues, and the most frequently asked question is why forex deposits and withdrawals are done via private transfers. These people often have some investment background, with many having experience in trading futures or stocks.
This article is updated simultaneously with WeChat official account: Huijia Century Studio.
First of all, I want to clarify that not all forex deposits and withdrawals are done through private transfers. There are actually several methods. The first, as mentioned earlier, is private-to-private transfers. The second is wire transfers. The third method involves using digital currencies for deposits and withdrawals. As you can see, most brokers in the market support these three types of transactions.
Next, let me explain why forex platform transactions use third-party transfers. There are a few reasons for this. Firstly, it is widely known that domestic forex margin trading has not been opened up in our country. Most domestic forex-related transactions are strictly exchange services, which have nothing to do with our current margin services. Secondly, all current platforms use US dollars for settlement. Therefore, we need to purchase US dollars and transfer them to a forex platform, but domestic foreign exchange controls are very strict, such as the annual limit of 50,000 USD for foreign currency purchases. To exchange foreign currency, the source of the currency must be verified, which is very inconvenient for most practitioners and investors. This is where USDT comes into play. Nowadays, third-party transfers are based on the USDT platform, and deposits and withdrawals are conducted through the matching of buy and sell orders online.
The second method for deposits and withdrawals is via wire transfer. Generally speaking, wire transfers are considered the most legitimate method in the industry. We purchase US dollars at a bank and transfer them to the foreign bank account of the forex broker. However, there are drawbacks, such as slow transaction times compared to third-party transfers or USDT transactions. Domestic wire transfers can take 1-5 business days and may not always go smoothly due to strict foreign exchange controls. Hong Kong bank accounts face fewer issues, but exchanging US dollars for RMB can still be complicated.
The last method is USDT deposits and withdrawals. This involves transferring USDT from your exchange or wallet to the corresponding recipient address on the platform. This can be cumbersome for beginners, especially in obtaining USDT. Currently, several major domestic exchanges, such as Binance and OKEx, allow USDT trading. They are industry leaders, and ordinary users can simply buy or sell USDT through these platforms.
At this point, I believe everyone has a clear understanding of the various payment methods in the industry. If there are any areas that are unclear, feel free to contact me for further discussion.
