Though details are currently scarce, Chinese regulators are reportedly looking into the use of bitcoin to avoid capital controls. According to Tencent Finance, the State Administration of Foreign Exchange (SAFE) is exploring how bitcoin can be used to circumvent capital flight. The news website cited unnamed sources close to regulators, and Tencent’s report was later cited by Bloomberg. The report emerges in the wake of statements from China’s central bank, which said today that it had met with domestic bitcoin exchanges this week, warning them about adhering to state regulations. It also comes as Chinese officials weigh instituting additional capital controls on top of existing constraints amid an outflow of funds from the country, as reported last month…
Just hours after it was first revealed that the People’s Bank of China (PBoC) had held closed-door meetings with domestic bitcoin exchanges, new details are emerging about the conversations. According to a new report by Caixin, the PBoC sought to restrict how the exchanges could seek to acquire potential new users, with the central bank indicating that the startups aren’t able to mention the depreciation of the yuan in connection with marketing or otherwise promote their services offline. Some of the involved exchanges were said to have cancelled planned activities that would have potentially utilized such a strategy. The article further states that exchanges were advised to comply with know-your-customer (KYC) and anti-money laundering (AML) laws,…
Financial experts all over the world are concerned over the situation in China. Country officials revealed the financial reserves, which sit as US$3tn right now. However, the PBOC reported over US$41bn in capital outflows affecting the Chinese economy in December 2016. These numbers do not seem to add up, and it appears the Chinese government is padding the reserve numbers. For quite some time now, experts speculate how Chinese capital outflows are much higher than projected. According to Goldman, these outflows spiked to US$69bn in November 2016. At that time, the PBOC reported just US$34bn worth of money leaving the economy. Such a vast discrepancy is alarming and highlights the official numbers need to be taken with a grain of salt. China’s Reserves May be…
These are quite exciting times for China, even though not all of the news is positive. One silver lining is how the country will focus more on fintech than ever before. A consortium of state-owned and private enterprises launched a US$1.44bn investment fund. All of this money will be used for acquisitions and mergers in 2017 and beyond. Under the Asia Fintech Merger And Acquisition Fund of Funds, China plans to put a strong focus on financial technology. The fund is led by Credit China Fintech Holdings. It is evident this collaborative effort aims to put fintech in China on the map. A positive development for a nation that is going through its fair share of financial turmoil. Chinese Enterprises Want To Get Involved In Fintech With US$1.44bn pooled together, the…
China has been imposing various degrees of curbing capital outflow throughout 2016. Not all of these attempts have been successful, but the government has come up with a new plan. Foreign currency purchases will be restricted even further moving forward. In doing so, the government aims to reduce the amount of money leaving the Chinese economy. Converting Yuan to foreign currency will become more difficult for everyone living in China. Additional information needs to be provided when requesting a foreign exchange. Additionally, consumers will need to explain the reasoning behind this request. This is a rather invasive measure imposed by the Chinese government in the war against capital flight. China Further Scrutinizes Foreign Currency Exchanges Chinese…