Does the Chinese banking reaction to Bitcoin have more to do with fissures in the banking system than their reaction to the currency?
Crypto Coin News has a great article examining just that. We've all known for a while that proponents of central banking do not often like proverbial hard money (that which supply can not be artificially altered) is that what is happening here?
CCN reports that "Recent reports from China indicate there may be more to the Bitcoin ban than meets the eye. According to the Financial Times (FT) the Chinese banking system is in crisis which could explain the Bitcoin ban in China. Chinese citizens seem to be running away from their own banking system in droves and their Government is closing the escape paths — including Bitcoin."
They go on to say that...
"During the run up of bitcoin in November you could watch the CNY currency leaking from China on sites like www.fiatleak.org and there was a breathtaking amount of Chinese currency leaking into BTC. The over night Repo rate is a good indicator of a liquidity problem for banks in China — the Chinese Repo rates have been occasionally spiking during the last twelve months. The overnight Repo rate is the rate that Chinese banks loan money between themselves overnight to balance the books. When the rates spike like this it is because the banks desperately need cash and they are willing to pay big interest rates to get it. This is not a positive sign for the Chinese banking system."
In a free market more desirable alternatives whether currency or consumer good win out against less favorable alternatives, unless the less favorable alternative can change its' value proposition. Is that what the PBOC smells? We will have to stay tuned to find out.
More @ Link: CryptoCoinsNews.com/