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It has less to do with China's theoretical alignment ("communism") as it does with the challenges to state financial controls, and in turn, China's economic mod
by nooron 9y ago
It has less to do with China's theoretical alignment ("communism") as it does with the challenges to state financial controls, and in turn, China's economic model, that bitcoin poses. Bitcoin is a very useful tool for evading financial and capital controls, which is problematic for an economy with a) rich people trying to cash out and b) a growth model dependent on policies that artificially increase savings rates while minimizing the number of places regular folks can store their wealth.
Basically, China wants artificially high savings rates and for people to keep their cash in state-connected banks, which keeps the supply of money for investment high, because this is baked into their growth model. Bitcoin undermines that.
- outwebyou 9y agothe high savings rate in China is a myth from 2004. In 2017, people poured all their savings into their kids/other relatives real estate purchases (which itself is a bubble). And the young people have credit card debts and no savings.
- nooron 9y agoReal estate investments are a store of wealth, ie a savings product. Real estate investments are one of the few vehicles to store wealth other than relatively basic accounts that are available to a broad swath of consumers.
- paxpelus 9y agoYes, tell that to Greek citizens that were buying houses for 300k and now their value is less than 100k for the same house. Real estate is not a store of wealth, this has been proven many times in the past in several countries. I agree though that the prices on real estate are more stable than any cryptocurrency.