China's Bitcoin Capital Flight Ramps up as FinTech Innovation Progresses

More and more mainstream attention focuses on the potential use of bitcoin for capital flight in China — while blockchain breaks new ground.

Also read: China’s Increasing Debt Burden Could Affect the Bitcoin Economy

China Capital Flight in BTC ‘Makes Sense’

As growth in the world’s largest bitcoin-trading country slows, correlations in the USD price of the Yuan and bitcoin are leading to suggestions that investors are using the currency as a go-to money transfer method.

“Interestingly, the larger price movements in the digital currency have tracked devaluations in the [Yuan],” Investopedia writes today.

Citing an RMB/BTC graph from Bloomberg, the publication notes that upticks in the BTC value per USD closely follow government moves to devalue the Yuan.

“When these events occur. . .the price of Bitcoin soon follows,” it comments.

Despite such activity staying confined to a very small section of society, since China still has the most traders of Bitcoin worldwide, so the numbers involved still hold significance. In the 30 days to October 5, traders exchanged 42.5 million BTC for Yuan, compared to just 352,000 USD in same period.

“The price of Bitcoin lately does seem to track to a certain extent the dollar price of the Yuan, and it makes sense that Bitcoin could be used as a tool to exceed money exchange limits set by Chinese regulators,” Investopedia adds. “If true, the price of Bitcoin may spike once again the next time the CNY is lowered.”

Bitcoin as a get-out for Chinese investors has been a conspicuous phenomenon for some years, yet if current trends continue, both the Bitcoin community and traditional investors will start expecting a legislative response.

Chinese Firsts for Fiat and Crypto

Blockchain-based fintech news meanwhile also shows no sign of abating in the region. Asset-tracking startup Antshares last week revealed closure of its $4.5 million ICO, along with a partnership with both Microsoft and Hyperledger for its “Onchain universal Blockchain.”

Antshares represents something of a watershed moment locally. Along with earning the title of first open source blockchain project developed in China, its ICO received over 50 percent foreign participation, raising over 6,000 BTC in what a press release describes as “the first significant Chinese ICO.”

“Our vision is to make Onchain a truly universal Blockchain framework,” CEO Da Hongfei said.

“Utilizing different plug-in modules, our framework could be applied for a public chain, a consortium chain or even a private chain.”

The Yuan, meanwhile, became the world’s fifth IMF reserve currency October 1.

What do you think about the proposed RMB-BTC trend? Let us know your thoughts in the comments section below!

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