There has been a question that has puzzled me for a long time: the country has always strictly controlled foreign exchange, so will virtual currency transactions pose a threat to foreign exchange control? Suppose someone buys BTC in China and then converts it into US dollars and transfers it abroad, the country can hardly regulate this. Will such a situation pose a huge threat to foreign exchange control, causing the country to have to ban the existence of virtual currency trading platforms?
It turns out that this concern is justified. On September 30, 2017, my country officially banned the operation of virtual currency trading platforms. Some people believe that in this process, the country's foreign exchange reserves have not decreased, so the impact is not significant. Indeed, when the trading volume is small, the impact is minimal. But once the trading volume increases, a large amount of BTC held in China is sold abroad, and someone will inevitably buy back the foreign BTC, and foreign traders usually do not accept RMB payments, so foreign exchange is needed at this time.
If this is difficult to understand, you can refer to the legal provisions that each person cannot carry more than 31.25 grams of gold when leaving the country. On the surface, carrying gold does not seem to directly affect foreign exchange reserves, but in fact, such regulations are also intended to prevent large-scale asset transfers from causing an impact on the country's economic stability. Similarly, if virtual currency transactions are not restricted, it will have a profound impact on foreign exchange control and national financial security. Therefore, banning the existence of virtual currency trading platforms is to maintain the country's financial stability and foreign exchange security.
