"Bloomberg reports that the central bank is considering restricting disguised currency conversion of Bitcoin." What should you do with your Bitcoin?

Today, a piece of news shocked the entire digital currency community.

The news content is as follows:

"According to Bloomberg, following Hong Kong insurance, electronic virtual currency has also entered China's sight of blocking capital outflow. People familiar with the matter who wish to remain anonymous said that the central bank and other regulatory authorities are studying measures to restrict the conversion of RMB into US dollars through Bitcoin transactions and the remittance of funds abroad. The measures under consideration may include restricting domestic trading platforms from transferring Bitcoin to overseas platforms, or limiting the amount of Bitcoin transferred to overseas platforms."

As soon as the news came out, Bitcoin fell from a high of around 5,130 yuan to below 5,000 yuan, but the market reaction was limited, and the price of Bitcoin then fell back to around 5,050 yuan.

First, let’s take a look at the purpose of restricting Bitcoin mentioned in this news, which is to “block capital outflow.” So with the current volume of Bitcoin, is it enough to “block capital outflow”?

The “capital outflow” mentioned in the news should be: using RMB to buy Bitcoin on domestic exchanges, selling it on foreign exchanges and then withdrawing it in US dollars. According to this statement, the Bitcoin trading volume should have increased significantly.

Let's take a look at the mainstream Bitcoin trading platforms abroad. The transaction volume is usually in the thousands, and occasionally exceeds 10,000 Bitcoins. Converted at the current price, it basically maintains tens of millions of RMB. Excluding the transaction volume caused by exchange arbitrage and robot trading, it seems that there is still some distance from large-scale capital outflow. At the same time, since the accelerated depreciation of the RMB in October this year, the Bitcoin trading volume of foreign exchanges has not increased significantly.

In addition, some netizens mentioned that the motivation of "RMB-Bitcoin-US dollar" needs to be examined. RMB converted into Bitcoin can better preserve its value, so why should it be converted into US dollars that are depreciating relative to Bitcoin?

Next, let us explore the feasibility of the measures being considered by the “central bank and other regulatory authorities” in the article.

Measures under consideration:
1. Restrict domestic trading platforms from transferring Bitcoin to overseas platforms
2. Limit the amount of Bitcoin transferred to overseas platforms

The transfer quantity of domestic trading platforms is relatively easy to limit, so how to determine which addresses belong to foreign trading platforms?

Industry insiders explained:

“From a purely technical perspective:
1. It is feasible to limit the amount of Bitcoin that can be transferred out per person per day on domestic trading platforms;
2. If the exchange hands over all addresses, the transfer details of each domestic exchange can be verified;
3. It is impossible to verify which addresses belong to overseas platforms. "

Several exchange insiders revealed that strengthening supervision is the general trend , but they have not received any relevant notifications so far.

In fact, other than through trading platforms, Bitcoin transfers in and out through other channels cannot be restricted. For individual users, even if the number of Bitcoin transfers out of an individual account on an exchange is limited every day, any action of the individual Onchain wallet cannot be restricted. In addition, over-the-counter transactions will not be restricted.

In December 2013, the central bank and five other ministries issued a notice that Bitcoin is not a currency, and that the subject of foreign exchange management supervision is currency, not commodities. If foreign exchange supervision is to be implemented as the news said, does it have to first recognize that Bitcoin is a currency?

Finally, let's commemorate Bloomberg who was innocently shot...