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by RockyMcNuts
3802 days ago
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> They'll get through regardless of the block size. They'll get through until China bans it. China has a classic trilemma : let the currency depreciate, give up on monetary stimulus, or institute capital controls. Pick any 2 : https://en.wikipedia.org/wiki/Impossible_trinity To date, they've shown pretty good success in controlling the Internet and Bitcoin is no different. I don't think Bitcoin advocates have necessarily thought through the implications if countries were no longer able to control capital movements, hence pursue independent monetary and currency policies. As the euro experience has shown (also the history of the gold standard), it's not necessarily an improvement in monetary arrangements. |
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China's leaky exchange controls are a strange subject. So much is leaking that investors in China are buying large amounts of property in London, New York, and Miami, but not occupying it, as a way to stash cash. However, the outflows aren't big enough to affect the value of the yuan.
The People's Bank of China (comparable to the Treasury Department plus the Fed) hasn't cracked down as much as they could. There seems to be an internal policy disagreement within China's government over whether the yuan should be an international currency. To be used internationally means allowing convertibility and giving up some control, and facing the possibility that China's domestic economy can be yanked around by world events. But convertibility increases China's external economic power. Back in 2013, there were announcements of convertibility within the next year. In November 2015, the target date was 2020.[1] China's stock market crashed last week, which may prompt tightening up on capital outflows again.
Much of what happens with Bitcoin is driven by these far larger issues.
[1] http://www.bloomberg.com/news/articles/2015-11-03/china-deve...