China scrutinizes bitcoin on capital flight fear

Chinese regulators have taken steps to ensure bitcoin is not used to facilitate capital flight, even as investors in the cryptocurrency say they doubt it is being used to transfer large amounts of cash out of China. The apparent correlation between a depreciating renminbi and bitcoin’s price surge in recent months has prompted suspicion that the virtual asset is contributing to outflows, according to the Financial Times. Bitcoin’s Chinese price rose 145% in 2016, as the renminbi suffered its worst year on record, weakening 6.5%. Renminbi transactions accounted for 98% of global bitcoin trading volume over the past six months, according to data from bitcoinity.org.  The People’s Bank of China met with the country’s three largest bitcoin exchanges last week to remind them to “strictly” follow relevant regulations on risk control and to “clean up” any irregular practices. Bitcoin has fallen 9% since the PBoC announcements.