China mulls limiting bitcoin transactions to curb outflows

Beijing

CHINA'S regulators are studying measures to limit transactions that use bitcoins to take funds out of the country, according to people familiar with the matter.

Officials are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad, the people said.

Regulators noticed recently that some investors bought bitcoins on local exchanges and sold them offshore, evading rules on foreign exchange and cross-border fund flows, the people added. They declined to be identified because the information isn't public.

Bitcoin has surged 21 per cent since the end of September as the yuan's declines accelerated, boosting speculation Chinese investors were buying the cryptocurrency as a hedge against further weakness.

With the risk of quicker depreciation rising along with the odds of an impending US interest-rate hike, policy makers are seeking to restrict outflow channels.

The government classified bitcoin as a commodity and not currency in 2013, placing it outside the purview of the foreign-exchange regulator, the people said. BLOOMBERG