Does Bitcoin Pose a Threat to China’s Economic Security?

Dr Alessandro Arduino is the co-director of the Security Crisis Management programme at the Shanghai Academy of Social Science (SASS) and was a visiting senior fellow with the China Programme at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

In this article, Arduino addresses China’s role in the global digital currency markets and how domestic investors and regulators could impact its development.

forbidden city, china

2016 began in China with two sequential market crashes that forced the regulators to intervene in the Shanghai and Shenzhen stock exchanges.

As they did in response to the stock bubble that burst in 2015, Chinese regulators intervened to organise a centrally planned recovery. Despite a stimulus of US$20bn that the People’s Bank of China (PBoC) pumped into the market during the 5th January market crash, the yuan kept weakening.

Gold, as the usual commodity of refuge for investors during uncertain times, started to gain momentum.

At the same time, the virtual currencies that employ heavy cryptography and blockchain technology, such as bitcoin, have increased in value thanks to Chinese investments.

Cryptocurrencies and capital controls

Cryptocurrencies – bitcoin in primis – are poised to increase vulnerabilities and uncertainty in the Chinese economy during 2016.

The security

Read more ... source: TheBitcoinNews