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Now do you understand why the Chinese government is attempting to ban Bitcoin? Chinese people are scared of their currency and want an easy way to convert thei

Now do you understand why the Chinese government is attempting to ban Bitcoin? Chinese people are scared of their currency and want an easy way to convert theirs into a non-traceable one in case the country descends into a depression.

SubiculumCode 9y ago
I was hoping that is was an action that would put pressure on North Korea. North Korea has been trying to use Cryptocurrencies to circumvent sanctions.
- Waterluvian 9y ago
  I thought the amount at which they're doing so was a drop in the bucket worthy of nothing more than a headline?
  - QAPereo 9y ago
    Compared to their other money making activities, it doesn’t even register as a drop.
    - stctgion 9y ago
      Given the recent duck Vs elephant discussion I'd like to caution you that a drop is very likely to be in excess of 10^20 times smaller than an ocean
Laforet 9y ago
Why does anything and everything has to do with bitcoin? There are hundreds of trillions of CNY in circulation compared to ~1 billion USD worth of bitcoin being traded everyday. Compared to forex the volume of all cryptos combined is a drop in the bucket. >Chinese people are scared of their currency and want an easy way to convert theirs into a non-traceable one in case the country descends into a depression. There is a lot of talk of potential deflation cycle coming in, and in that case holding fiat is clearly the wiser option.
- horsecaptin 9y ago
  That is interesting. Is it easier for them to buy bitcoins over other assets? What about Gold / other foreign investments such as US securities?
  - JumpCrisscross 9y ago
    The principal mode of Chinese capital flight is through Hong Kong- and Macau-based invoice factories. A lawyer in those jurisdictions writes an invoice for $50 million and the Chinese firm “pays” it. Bitcoin is irrelevant to Chinese capital controls. Disclaimer: I am not a lawyer. This is not legal advice, nor advice of any other kind. Do not launder money.
    - irq11 9y ago
      ”A lawyer in those jurisdictions writes an invoice for $50 million and the Chinese firm “pays” it. Bitcoin is irrelevant to Chinese capital controls.” ...all of which is easily traceable by the government. Do enough of it, and you’ll eventually be disappeared for a friendly conversation with the police. It’s also expensive, and has a central point of failure (the lawyer). That is why bitcoin is the up-and-coming escape mechanism for yuan. Obviously, not everyone was doing this, but it was becoming a trend, hence the crackdown. It was absolutely not “irrelevant”. (Aside: I love the way that bitcoin people are incredibly imaginative when it comes to visions of borderless, regulation-free financial systems, but can’t see their way past even the most trivial of fraud incentives involving their system.)
      - JumpCrisscross 9y ago
        > all of which is easily traceable by the government This goes back to my original point regarding capital controls: previously discreetly tolerated, their violation is now openly acknowledged. If you stroll through Hong Kong you'll find invoicing services being openly advertised. Why they're tolerated is more murky. My guess is it's a vital tool for China's movers and shakers. In that regard, one could argue that hiding under their bulk is a safer bet than flagging oneself as politically impotent by using outside channels. > It’s also expensive, and has a central point of failure (the lawyer) I haven't heard of any big frauds in the invoicing business, though there's no incentive to publicize it. These lawyers are typically providing other services to the capital providers, so it's--all in--probably less expensive than trying to surreptitiously purchase and dump large numbers of Bitcoins. From what I've heard, they're typically associated with internationally-reputable firms. There's an interesting conversation about the strengths and detriments of invoicing versus Bitcoin for purposes of laundering money. But this isn't that conversation. The reality is most capital flight occurs through the former, to the point of making the latter numerically irrelevant. Capital controls were almost certainly not a significant factor in China's moves against Bitcoin. Disclaimer: I am not a lawyer. This is not legal advice, not advice of any other kind. Do not launder money.
__Joker 9y ago
Not only bitcoin, China is try to clamp down different capital flights. Recently had also limited or banned foreign investment by Chiense companies.
- __Joker 9y ago
  Not only bitcoin, China is trying to clamp down different types capital flights. Recently had also limited or banned foreign investment by Chiense companies.
JumpCrisscross 9y ago
> Now do you understand why the Chinese government is attempting to ban Bitcoin? Chinese people are scared of their currency The People's Bank of China is loosening capital controls [1]. The yuan is overheating and the PBoC wants to weaken the currency. Capital controls weren't the reason behind China's move. Fraud was. Constraining the problem to China-specific characteristics appears to be why this "China banned Bitcoin because of capital controls" meme has taken root. [1] http://www.reuters.com/article/us-china-economy-capital-controls/china-relaxes-some-cross-border-capital-curbs-as-yuan-steadies-sources-idUSKBN17L0M2 http://www.reuters.com/article/us-china-economy-capital-cont...
- throwaway2048 9y ago
  your article is from 6 months ago, and is only talking about short term measures they had implemented a few months beforehand. In 2017 china has has: Enacted laws that lowered yearly money per person taken from china from $64,000 to $9000[1] Seen foreign outflow investments drop off a cliff in 2017 (almost 50%!) [2] Massively restricted allowed classes of foreign investment such as real estate, traditionally one of the few ways private citizens and companies were allowed to take money out of china [3] Cracked down heavily on bitcoin, an excellent currency exfiltration tech. Its clear that this is part of a broader trend, please stop reposting this misinformation laden comment. [1] http://www.cbc.ca/news/canada/british-columbia/housing-market-bubble-pop-overblown-china-capital-controls-1.4191491 http://www.cbc.ca/news/canada/british-columbia/housing-marke... [2] https://www.forbes.com/sites/ellensheng/2017/07/14/deal-breakers-chinese-outbound-investment-dropped-46-in-first-half-of-2017/#5bb2eb1455a3 https://www.forbes.com/sites/ellensheng/2017/07/14/deal-brea... [3] https://www.brookings.edu/blog/order-from-chaos/2017/08/23/chinas-new-investment-rules/ https://www.brookings.edu/blog/order-from-chaos/2017/08/23/c...
- joe_the_user 9y ago
  You've linked to that six-month-old article in two different discussions now. The article provides virtually no details concerning what capital controls were loosened and in any case, whatever these measures, they were one-time event that doesn't prove a trend. China certainly wants to say it's loosening capital control and it's perfectly capable of showing the wire services some measures. If you want to argue a trend, show us an analysis from a respected outside observer. Show me a long article from outside observer.
thy439743 9y ago
You do realize CNY is one of the most robust currencies out there right ? I'd be more worried about the USD at this point (esp. if the petrodollar starts collapsing); but then there are enough Asians (Japan, China included) who'd not want to see this happen.

SubiculumCode 9y ago

I was hoping that is was an action that would put pressure on North Korea. North Korea has been trying to use Cryptocurrencies to circumvent sanctions.

Waterluvian 9y ago
I thought the amount at which they're doing so was a drop in the bucket worthy of nothing more than a headline?
- QAPereo 9y ago
  Compared to their other money making activities, it doesn’t even register as a drop.
  - stctgion 9y ago
    Given the recent duck Vs elephant discussion I'd like to caution you that a drop is very likely to be in excess of 10^20 times smaller than an ocean

Laforet 9y ago

Why does anything and everything has to do with bitcoin? There are hundreds of trillions of CNY in circulation compared to ~1 billion USD worth of bitcoin being traded everyday. Compared to forex the volume of all cryptos combined is a drop in the bucket. >Chinese people are scared of their currency and want an easy way to convert theirs into a non-traceable one in case the country descends into a depression. There is a lot of talk of potential deflation cycle coming in, and in that case holding fiat is clearly the wiser option.

horsecaptin 9y ago
That is interesting. Is it easier for them to buy bitcoins over other assets? What about Gold / other foreign investments such as US securities?
- JumpCrisscross 9y ago
  The principal mode of Chinese capital flight is through Hong Kong- and Macau-based invoice factories. A lawyer in those jurisdictions writes an invoice for $50 million and the Chinese firm “pays” it. Bitcoin is irrelevant to Chinese capital controls. Disclaimer: I am not a lawyer. This is not legal advice, nor advice of any other kind. Do not launder money.
  - irq11 9y ago
    ”A lawyer in those jurisdictions writes an invoice for $50 million and the Chinese firm “pays” it. Bitcoin is irrelevant to Chinese capital controls.” ...all of which is easily traceable by the government. Do enough of it, and you’ll eventually be disappeared for a friendly conversation with the police. It’s also expensive, and has a central point of failure (the lawyer). That is why bitcoin is the up-and-coming escape mechanism for yuan. Obviously, not everyone was doing this, but it was becoming a trend, hence the crackdown. It was absolutely not “irrelevant”. (Aside: I love the way that bitcoin people are incredibly imaginative when it comes to visions of borderless, regulation-free financial systems, but can’t see their way past even the most trivial of fraud incentives involving their system.)
    - JumpCrisscross 9y ago
      > all of which is easily traceable by the government This goes back to my original point regarding capital controls: previously discreetly tolerated, their violation is now openly acknowledged. If you stroll through Hong Kong you'll find invoicing services being openly advertised. Why they're tolerated is more murky. My guess is it's a vital tool for China's movers and shakers. In that regard, one could argue that hiding under their bulk is a safer bet than flagging oneself as politically impotent by using outside channels. > It’s also expensive, and has a central point of failure (the lawyer) I haven't heard of any big frauds in the invoicing business, though there's no incentive to publicize it. These lawyers are typically providing other services to the capital providers, so it's--all in--probably less expensive than trying to surreptitiously purchase and dump large numbers of Bitcoins. From what I've heard, they're typically associated with internationally-reputable firms. There's an interesting conversation about the strengths and detriments of invoicing versus Bitcoin for purposes of laundering money. But this isn't that conversation. The reality is most capital flight occurs through the former, to the point of making the latter numerically irrelevant. Capital controls were almost certainly not a significant factor in China's moves against Bitcoin. Disclaimer: I am not a lawyer. This is not legal advice, not advice of any other kind. Do not launder money.

__Joker 9y ago

Not only bitcoin, China is try to clamp down different capital flights. Recently had also limited or banned foreign investment by Chiense companies.

__Joker 9y ago
Not only bitcoin, China is trying to clamp down different types capital flights. Recently had also limited or banned foreign investment by Chiense companies.

JumpCrisscross 9y ago

> Now do you understand why the Chinese government is attempting to ban Bitcoin? Chinese people are scared of their currency The People's Bank of China is loosening capital controls [1]. The yuan is overheating and the PBoC wants to weaken the currency. Capital controls weren't the reason behind China's move. Fraud was. Constraining the problem to China-specific characteristics appears to be why this "China banned Bitcoin because of capital controls" meme has taken root. [1] http://www.reuters.com/article/us-china-economy-capital-controls/china-relaxes-some-cross-border-capital-curbs-as-yuan-steadies-sources-idUSKBN17L0M2 http://www.reuters.com/article/us-china-economy-capital-cont...

throwaway2048 9y ago
your article is from 6 months ago, and is only talking about short term measures they had implemented a few months beforehand. In 2017 china has has: Enacted laws that lowered yearly money per person taken from china from $64,000 to $9000[1] Seen foreign outflow investments drop off a cliff in 2017 (almost 50%!) [2] Massively restricted allowed classes of foreign investment such as real estate, traditionally one of the few ways private citizens and companies were allowed to take money out of china [3] Cracked down heavily on bitcoin, an excellent currency exfiltration tech. Its clear that this is part of a broader trend, please stop reposting this misinformation laden comment. [1] http://www.cbc.ca/news/canada/british-columbia/housing-market-bubble-pop-overblown-china-capital-controls-1.4191491 http://www.cbc.ca/news/canada/british-columbia/housing-marke... [2] https://www.forbes.com/sites/ellensheng/2017/07/14/deal-breakers-chinese-outbound-investment-dropped-46-in-first-half-of-2017/#5bb2eb1455a3 https://www.forbes.com/sites/ellensheng/2017/07/14/deal-brea... [3] https://www.brookings.edu/blog/order-from-chaos/2017/08/23/chinas-new-investment-rules/ https://www.brookings.edu/blog/order-from-chaos/2017/08/23/c...
joe_the_user 9y ago
You've linked to that six-month-old article in two different discussions now. The article provides virtually no details concerning what capital controls were loosened and in any case, whatever these measures, they were one-time event that doesn't prove a trend. China certainly wants to say it's loosening capital control and it's perfectly capable of showing the wire services some measures. If you want to argue a trend, show us an analysis from a respected outside observer. Show me a long article from outside observer.

thy439743 9y ago

You do realize CNY is one of the most robust currencies out there right ? I'd be more worried about the USD at this point (esp. if the petrodollar starts collapsing); but then there are enough Asians (Japan, China included) who'd not want to see this happen.