China Steps in Against Bitcoin

The Chinese government has been strengthening requirements for citizens by converting their yuan. With Trump coming into office, China fears that lower values for the yuan will become a trade war even if the government is not actively trying to depreciate the yuan for trade. Conversions of yuan are already subject to a quota or currency controls in an effort to curb capital outflows.
Bitcoin has been the escape method for capital fleeing China. China’s major bitcoin exchanges halted or otherwise updated their bitcoin trading services. The changes to Bitcoin are being made in response to interactions with the People’s Bank of China. The People’s Bank of China delivered an ‘informal guidance’ that is beginning to take notice of the capital flight through Bitcoin exchanges. The central bank called in the big exchanges for a discussion.

This post was published at Armstrong Economics on Jan 13, 2017.