China ponders on Limiting Bitcoin Transactions to curb Outflows
According to Bloomberg sources, Chinese officials are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad. Further indicating that Chinese regulators were "just a little behind the curve", they allegedly noticed only recently that some investors bought bitcoins on local exchanges and sold them offshore, evading rules on foreign exchange and cross-border fund flows, the report further reveals.
A quick look at the uncanny correlation between the decline in the Yuan and the rise in the bitcoin, confirms that the digital currency has indeed been largely used to evade capital controls.
This news sparked fear among Chinese and other investors creating a significant drop on the rallying price of bitcoin.
However, it is still unclear how China can prevent the use and proliferation of bitcoin with its inherent decentralized nature.