Bitcoin liquidity is drying up in specific regions as a new “pay-to-exit” model quietly takes over

Bitcoin and crypto liquidity is becoming fragmented across specific regions like EMEA and APAC due to tightening access controls implemented by governments. Jurisdictions such as Belarus, Russia, India, and Thailand are employing tools like ISP-level domain blocking, app store removals, and strict KYC requirements to force users onto locally licensed or regulated exchanges. This creates a new "pay-to-exit" model where exiting capital is constrained by local compliance, residency status, and associated fees or penalties, effectively acting as digital capital controls. The enforcement models vary—from full geo-blocking (Belarus, Thailand) to license gating (Malaysia, Türkiye) and a register-to-reenter path involving fines (India). This fragmentation causes short-term market dislocations, wider spreads, and higher slippage, particularly for altcoins, as liquidity concentrates on compliant venues, shifting hedging costs and increasing reliance on less transparent OTC desks and P2P channels.

(Source：CryptoSlate)