Bitcoin’s Capital Controls Resistance a Concern says IMF as $1 Trillion Leaves ChinaFiat currencies and commodities have been sliding downwards against the US dollar for some time as investors are closely watching China and its floundering economy. With the Shanghai Composite Index in a downward spiral, reports of rumored tighter capital controls in China continue to build. In result, Bitcoin may once again experience a windfall as Beijing tightens its grip to prevent capital from fleeing offshore. However, authorities are well aware of cryptocurrencies, and the subject has come up in certain think tank reports, the IMF, and during the recent World Economic Forum (WEF) in Davos.IMF: Bitcoin a ‘Powerful Tool’
At the WEF conference in Switzerland, executives, government representatives, innovators, and economists met at the annual meeting to discuss the global economy. Discussions at the event revolved around new economic emergents and concepts that are transforming global trade. In addition, innovations in fintech such as distributed ledgers were discussed a great deal. One aspect in some of these conversations was China’s economy and how capital outflow is becoming a real concern. Bloomberg reports that almost $1 trillion USD in wealth has left the country already in recent months.
On the last day of the WEF event, the Bank of Japan Governor Haruhiko Kuroda suggested that the country’s leaders exercise curbing the wealth leaving China. IMF Managing Director Christine Lagarde was asked about the Japanese Governor’s statement. “The massive use of reserves would not be a particularly good idea,” she explained.
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