Goldman Sachs recently reported the yuan is involved in over 80% of bitcoin-to-traditional currency transactions. In a Bloomberg article, William Pesek suggests that China might crack down on its citizens use of the crypto-currency. While speculation accounts for a sizable portion of Chinese bitcoin activity, Pesek suggests that remittances and money laundering are driving factors as well.
I do wonder if the rampant attention towards Bitcoin creates any destabilizing factors for the yuan and the Chinese government’s control over the economy. If the use of Bitcoin – or at least the thought of it – becomes pervasive, what might stop people from putting their trust in a developing nation’s currency. Of course, that is a large hypothetical, but China’s aggressive stance at least suggests they won’t tolerate Bitcoin as a way to avoid government oversight.