2013-11-21 Bloomberg: China will not increase dollar reserves anymore

[ShadowOfHarbringer]

Well, this is not strictly Bitcoin article, but related. Also, some Bitcoin in comments below the article

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.

http://www.bloomberg.com/news/2013-11-20/pboc-says-no-longer-in-china-s-favor-to-boost-record-reserves.html

[JackH]

This could be big! Maybe China actually invented Bitcoin.... Fed up with the FED printing USD? 

[exstasie]

This could be big! Maybe China actually invented Bitcoin.... Fed up with the FED printing USD? 

Makes sense to distance themselves from the USD.  Maybe the chinese are so pissed that the USD is still considered the main currency for trade, that they invented BTC to takeover.

[djalexr]

very interesting and definately related to bitcoin, albeit indirectly. Am in China atm, this particular bloomberg article is blocked by the great firewall of china, just for your info.

[zeroday]

They should encourage their businesses to cease accepting USD in export operations and switch to bitcoin, which then to be exchanged for CNY.

[cr1776]

Do the same with the Euro (unless it is the Cyprus Euro). Lol

 

They should encourage their businesses to cease accepting USD in export operations and switch to bitcoin, which then to be exchanged for CNY.

[deisik]

They should encourage their businesses to cease accepting USD in export operations and switch to bitcoin, which then to be exchanged for CNY.

Even if they wanted they just couldn't switch to anything but USD. The USA is the biggest trading partner of China, so they have no other choice actually but to accept dollars. Besides that, the recent economic success of China is primarily due to American companies investing into their economy (read their businesses aren't really theirs), so still no alternative...

[StarfishPrime]

They should encourage their businesses to cease accepting USD in export operations and switch to bitcoin, which then to be exchanged for CNY.

Even if they wanted they just couldn't switch to anything but USD. The USA is the biggest trading partner of China, so they have no other choice actually but to accept dollars. Besides that, their recent economic success is primarily due to American companies investing into their economy (read, their businesses aren't really theirs), so still no alternative...

Some chinese manufacturers and distributors have quietly been accepting btc over this past year already, often preferring bitcoin due to the speed of payment, etc.

Once the benefits become apparent to more suppliers and buyers, I'd be surprised if this didn't catch on very quickly - replacing wire transfers for a significant percentage of US-Chinese commerce.

[deisik]

Once the benefits become apparent to more suppliers and buyers, I'd be surprised if this didn't catch on very quickly - replacing wire transfers for a significant percentage of US-Chinese commerce.

It is not all that simple. If you import something (or export for that matter) you have to declare the goods at the customs with their corresponding price list. I doubt it strongly the contractors would show the price in BTCs and still more if they would try to deceive, i.e. write down the price in dollars but pay out in bitcoins...

This is not something that you could easily spit upon

[LiteCoinGuy]

heard about that some days ago. its big news 

[notthematrix]

Once the benefits become apparent to more suppliers and buyers, I'd be surprised if this didn't catch on very quickly - replacing wire transfers for a significant percentage of US-Chinese commerce.

It is not all that simple. If you import something (or export for that matter) you have to declare the goods at the customs with their corresponding price list. I doubt it strongly the contractors would show the price in BTCs and still more if they would try to deceive, i.e. write down the price in dollars but pay out in bitcoins...

This is not something that you could easily spit upon

Price in BTC  is no probklem , only thing they have to do is calculate the $ price....
with will be more and more , so in the end it will be cheaper and cheaper if you use BTC instead of dollar

[deisik]

Price in BTC  is no probklem , only thing they have to do is calculate the $ price....
with will be more and more , so in the end it will be cheaper and cheaper if you use BTC instead of dollar

Could you please provide actual facts that the price of the contract for delivery of goods from China to the USA was set in BTC and the goods were cleared through the U.S. Customs and Border Protection agency? Scan of a CBP declaration with price in it would do...

[StarfishPrime]

Once the benefits become apparent to more suppliers and buyers, I'd be surprised if this didn't catch on very quickly - replacing wire transfers for a significant percentage of US-Chinese commerce.

It is not all that simple. If you import something (or export for that matter) you have to declare the goods at the customs with their corresponding price list. I doubt it strongly the contractors would show the price in BTCs and still more if they would try to deceive, i.e. write down the price in dollars but pay out in bitcoins...

This is not something that you could easily spit upon

It's actually very simple. Pricing, invoicing, customs documents etc are in USD, but payment is made in BTC. Buyers all over the world already buy USD in various local currencies to pay chinese suppliers (in USD) so this is nothing particularly new at all for those familiar with international trade.

It will be a long time before companies routinely invoice in BTC, but payments in BTC for USD orders are happening today.

 

[BTCLuke]

^I wanna know the real answer here. Does anyone know an actual importer/exporter?

If you can simply tell customs that you received $X when in fact you were paid in YBTC, then the game is all over... You can expect all internation business to be transacted in bitcoin coming soon... Period. They'll be forced to do so just to stay profitable.

I somehow doubt this is the case though... Seems to me like customs agents will check with banks to see if the amount paid is what was taken out of the payee's account... At least above a certain dollar limit.

Anyone know the rule here?

[StarfishPrime]

^I wanna know the real answer here. Does anyone know an actual importer/exporter?

If you can simply tell customs that you received $X when in fact you were paid in YBTC, then the game is all over... You can expect all internation business to be transacted in bitcoin coming soon... Period. They'll be forced to do so just to stay profitable.

I somehow doubt this is the case though... Seems to me like customs agents will check with banks to see if the amount paid is what was taken out of the payee's account... At least above a certain dollar limit.

Anyone know the rule here?

Yes. Many.

Customs has no real interest in what currency you've paid - and actually whether it's even been paid or not (net 30 terms are not uncommon among trusted trading partners, so merchandise often arrives before it is actually paid for). International business (even to the EU) is often conducted in USD - the only thing that really matters is accuracy of the customs documentation (i.e. value of the goods, more often than not in USD). That's the way it works.

Exchange rates for duty/taxes etc are just calculated by customs at time of import. A customs invoice in BTC (at least today) would likely cause all kinds of problems - what would customs agencies use for an "official" exchange rate? - No freight company would likely accept it without a USD declared value anyway. I wouldn't even want to try it.

But paying BTC for USD invoices - it happens all the time, already.

[BTCLuke]

Customs has no real interest in what currency you've paid... But paying BTC for USD invoices - it happens all the time, already.

I just looked up some numbers and it appears that 'the USA' paid around 37.5 TRILLION bucks for Chinese imports last year.

Global trade of course would be a number much greater than this, probably 50x larger.

Obviously the officials in government aren't going to buy bitcoin to do trade with anyday soon, but businesses like walmart would save Billions every year if they started paying for imports in BTC.

If what you say is accurate, then the little guys already have an advantage over the bigger guys in paying for all of their shipments with BTC, which will either make them into the bigger guys, or at least make their competition use BTC to compete. Eventually, it can't help but to trickle up to the largest of corporations, pumping several tens of Trillions of USD's worth of wealth into bitcoin.

Twelve Trillion USD invested in BTC with a 12 million BTC supply would be a $1 Million bitcoin.

...And that's without any user adoption by the people on the street; not even a single merchant accepting them.


WHAT IS STOPPING THIS AND HOW DO WE DESTROY THAT?

[deisik]

It is not all that simple. If you import something (or export for that matter) you have to declare the goods at the customs with their corresponding price list. I doubt it strongly the contractors would show the price in BTCs and still more if they would try to deceive, i.e. write down the price in dollars but pay out in bitcoins...

This is not something that you could easily spit upon

It's actually very simple. Pricing, invoicing, customs documents etc are in USD, but payment is made in BTC. Buyers all over the world already buy USD in various local currencies to pay chinese suppliers (in USD) so this is nothing particularly new at all for those familiar with international trade.

You said that buyers buy USD to pay Chinese suppliers in USD. I agree that there is nothing particularly new in all this. But that was not my point...

[deisik]

It will be a long time before companies routinely invoice in BTC, but payments in BTC for USD orders are happening today.

Between which contractors? If you read my posts carefully, you would have noticed that I was talking about international trade between China and the USA... If you tried to pay in BTC for USD orders but got caught what would happen?

[notthematrix]

It will be a long time before companies routinely invoice in BTC, but payments in BTC for USD orders are happening today.

Between which contractors? If you read my posts carefully, you would have noticed that I was talking about international trade between China and the USA... If you tried to pay in BTC for USD orders but got caught what would happen?

Notting . why btc dont pass a bank . if you put the dollar price on the delivery you end up paying the tax in dollars why I know this?
well I've done it and it works , they can not see the transaction you payed to the camponey , you just put $ price on the box/container , but it does not matter if you payed your counterpart in BTC.
Dollar will be weaker and weaker , compony's will the start avoiding the USA , by making transactions outside the US.
The stuff can be send to the US but the bill can be payed outside the US with bitcoins.

[StarfishPrime]

It will be a long time before companies routinely invoice in BTC, but payments in BTC for USD orders are happening today.

Between which contractors? If you read my posts carefully, you would have noticed that I was talking about international trade between China and the USA... If you tried to pay in BTC for USD orders but got caught what would happen?

"Got caught"? doing what?

Nothing would "happen". There's nothing remotely questionable or unlawful about sending BTC to China. Happens all the time. Today. For everything from electronic parts to textiles.