More than 80% of bitcoin transactions take place in Chinese yuan, according to a new research report on payments from Goldman Sachs.

Chinese yuan trading volume has made up a majority of bitcoin exchange transactions for the last year or so. But as you can see in the chart below, yuan bitcoin transactions really spiked in mid-2013. They went from less than 10% of transactions to more than 50% in less than six months. And there’s no sign that this is going to change anytime soon.

Interestingly, this transaction volume probably isn’t coming from major Chinese merchants, who by and large don’t accept bitcoin. From the GS report:

Thus far, most merchant Bitcoin activity has been concentrated among US and European-based merchants. Despite China’s higher trading activity, restrictions enacted by the PBoC to limit Chinese Bitcoin companies’ access to traditional Chinese payment processors have prompted many large Chinese companies to stop accepting Bitcoin. However, in light of a somewhat stabilizing Bitcoin economy in China, a few payment processors have reemerged, such as BTC China’s JustPay.

The report also points out that credit card rewards systems are basically non-existent in China, which likely makes the market much more open to alternative payments systems.

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