China restrict the import of gold while increasing demand for bitcoin
Last week, the India government plans to ban the import of gold, gold investors to levy heavy taxes. In December 1st, Chinese also began to restrict the import of gold, to prevent capital flight.
In the past few months, Chinese central bank and the government has implemented a strict capital control measures of financial supervision and combating wealth management products (WMPs), foreign investment and the transfer of funds.
The new strategy is to prevent the devaluation of the renminbi to restrict the import of gold. This way to achieve the government including opposition to licensing and requiring banks and major financial institutions to ban imports of gold from international sellers.
Import restrictions on gold
According to the financial times and the Chinese local media reports, China investors and traders to buy Precious metals, which seriously affected the Chinese gold market price.
In the next few weeks, Chinese plan strict supervision of the import of gold, in order to prevent the yuan Chinese escape. This year, the RMB against the U.S. dollar has depreciated by 5.8%, the central bank and the government are trying to restore China in the value of the renminbi.
In 2014, the people’s Bank of China has authorized the establishment of the Shanghai gold exchange, the international board, open the Chinese gold market to foreign investors. 1 years later, the Shanghai gold exchange launched daily gold auction, allowing investors to buy large amounts of gold.
The impact of the gold limit bitcoin
In most areas, gold is a safe haven asset for investors, traders and enterprises. Especially for the strict supervision of foreign investment such as Chinese countries, gold is relatively safe assets, low volatility and high global trading volume.
Although the current restrictions on gold imports will lead to rising demand for gold, but the gold export regulatory measures but also to avoid the investors and traders will be convertible into gold reserve currency. Therefore, it may be a new regulatory measures prompted investors and traders seeking high liquidity and high global trading volume of hedge assets.
China has a large number of bitcoin OTC market, mainly due to the many bitcoin miners. Because between bitcoin transactions directly without third party participation, bypassing the transfer of funds supervision, for most of the Chinese enterprises and investors, bitcoin can be regarded as a feasible way to protect investment and wealth.