Other reports say China’s end of year cash deficit and the capital outflows as well as the bond default have created some form of cash shortages and ramped up counterparty risk.
As the first day of January 2017 approaches, concerns that the yuan will likely depreciate further in the coming year because of the Chinese government’s enforced capital control may force more users seeking to move money out of the country to Bitcoin.
The 2017 outlook is a little different from previous years because of the continuous outflow of money out of the country despite the government’s efforts to reassure investors over economic slowdown, wild swings in the stock market and a sudden devaluation of the yuan in August.
On the other hand, what would likely happen as the capital outflow continues and the Chinese foreign exchange reserves shrinks to about US$3.05 tln (from US$3.99 tln in June 2014) as the People’s Bank of China spend to defend the yuan would determine the extent that Bitcoin will reach as from January 1.
January 1 is when the yearly $50,000 limit that the Chinese government permits citizens as the amount of money individuals can move out of the country in a year comes to effect. This measure enables many Chinese to pull their money out of China.
Investment bank China International Capital Corp (CICC) notes in a recent study that the average daily turnover of China’s foreign exchange market has increased by 12% from the US$30.5 bln daily average in November to US$34.2 bln as of Dec. 19.
According to Bloomberg, Chinese citizens have been bypassing the country’s limit of converting $50,000 a person per year by enlisting friends, relatives and even employees to send out cash on their behalf.
It also reported that this process of evading government’s controls has become a cause of worry not only in China but to bankers and regulators in other countries.
Another view is that if the annual quota – that sees a huge conversion of yuan to foreign exchange – is maintained, the exported Chinese money can flood other markets leading to a slight US dollar crash which may still push many to Bitcoin.
Considered in line with China introducing tighter capital control measures in November, there are now concerns that the government may probably reduce the $50,000 yearly limit to a low $10,000. This may push Chinese investors to find alternative means such as using Bitcoin to move money out.
Whichever way, it is not clear what will become of the $50,000 quota.
Coinbase Adds First Ethereum Token to Professional Trading Platform
Crypto exchange startup Coinbase is adding the 0x protocol token to its professional trading platform, Coinbase Pro.
Announced Thursday, the exchange said in a blog post that it had begun accepting
SpankChain Says Hacker Returned Stolen Crypto Funds
A hacker who stole 165.38 ETH from the SpankChain platform has returned the funds.
The payment platform focused on the adult industry announced Thursday that the hacker, who stole the funds from th
Korea's Largest Bitcoin Exchange Sells Stake in $350 Million Deal
Bithumb, currently the largest cryptocurrency exchange in South Korea by trading volume, just confirmed it has sold more than 38 percent of its total ownership to a blockchain consortium based in Sing
Nevada's Utilities Agency Eyes Blockchain for Energy Credit System
The Public Utilities Commission of Nevada, a government agency charged with supervising and regulating power utility services in the state, is looking to implement blockchain for its energy credit tra
Fake News Site Used New Zealand Prime Minister to Pump Bitcoin Startup
A fake news site has used the likeness of New Zealand Prime Minister Jacinda Ardern to promote articles on Facebook aimed to pump a crypto startup.
Local media source Stuff reported Friday that sev
FinCEN Blasts Iran's 'Malign' Use of Crypto to Bypass Economic Sanctions
A U.S. regulator is urging domestic exchanges to help prevent the Iranian regime from using cryptocurrency to bypass economic sanctions.
The Financial Crimes Enforcement Network (FinCEN) published
3 Bitcoin Price Factors That Suggest Bears Are in Charge
The prospect of a deeper drop in bitcoin prices has increased, price-volume analysis indicates.
The world's most valuable cryptocurrency, which had been trading sideways since September 22, fell sh
Leading Auction House Christie's to Record Art Sales on a Blockchain
London-based Christie's, one of the oldest and most noted art auction houses in the world, is turning to blockchain tech to securely store sales and provenance data.
The firm, which has a history g