Unlike in the western world, PBOC doesn't have the disclosure obligation. The recent event is a notification to the banks, to stop and close the trading account used by 15 named exchanges to receive deposite and send withdraw.
The notification was never meant to go to main stream media. In smaller cases too paltry for media interes, I expect, sometimes the bank account holder may simply gets confused why his account is closed, and finds no one can answer. A kind official may explain that "you know what I mean", implying there are higher orders. I'll divert the topic a minute for "you know what I mean": it is a famous quote. In a recent press conference, foreign medias are told they are forbidden to ask about Zhou Yong Kang. A journalist however asked, putting his/her news agency at risk. The spokesman said he doesn't know, and "you know what I mean" i.e. you know you are forbidden to talk about it and you know I am too.
This is to give an idea that notifications is not for the public, although PBOC may be aware that it will be on the news anyway. Notifications are not treated as secret neither, only 'internal information'. The notification was issued, according to Caixin, "around mid of March", so it has been a while. Remember that there were speculation why the supposely-fake news of China ban held down the market for longer than it should? Various speculation were there and I don't buy any of them †- seems it is because that some players in the market knows the 'notification', people who know more than I do. I've been acepted and deleted out of some seasoned investor's QQ group for a few rounds, and no one answers me why, otherwise I might have known more info before this hard crash - did I speak in English about China too much?
†
https://bitcointalksearch.org/topic/m.5848910Caixin said they confirmed the 'notification'.‡ Du Jun (co-founder of Huobi) said that 80% of the chance the news being untrue. Caixin is a reputable financial media in China. I'll believe Caixin's report for now. In the report it mis-quotes that China makes up 60% of the BTC trade world wide, while I guess the reality is less than 40%, 15 to 25% is a reasonable guess. But Caixin's ignorance of China's trade volume doesn't mean they'd risk misreporting PBOC.
‡
http://finance.caixin.com/2014-03-27/100657253.htmlSo what's the impact? Price was 520USD this Chinese morning. I am surprised the price only went down by this far. In comparison, 18th Dec PBOC news press made a 35% drop and this ban is harsher than that. Perhaps the people are waiting for a formal press release from PBOC, perhaps they ain't scared enough. After 18th Dec the Chinese bag holders are all long term investors, motivated by the dream of prosperity and wealth, but any long term investors dreaming of wealth are not long term investors, i.e. they look at the reward (of their effort, belief and sacrifices), not value (of their wise choice). I expect them to dump more; too much emotion are attached to BTC investments here. There is going to be a huge transfer of digital wealth from the east to the west. Read my other post about investor sentiments:
https://bitcointalksearch.org/topic/m.5639435 (a continued inspection of China )
Chinese people have little believe that the government does anything in their interest. If, after the saga, Bitcoin rises again, Chinese players will feel that the government robbed them away the chance to be rich, once again! This is a perfect backdrop for P2P trading network, or "blackmarket" as our government would like to call it. It is a very good opportunity to develop p2p trading software that links online and offline world. PBOC did not ban Bitcoin trades, only bans Bank's involvement, 'cos banning the trade requires other government sector to work with PBOC. With bank involvement removed, this is a good opportunity to test whether Bitcoin really can replace Banks on payment processing, deposite, transfer, settlement and foreign-exchange. (It cannot replace Bank for lending, because Bitcoin is a hard limited currency, not suitable for usury, but that need is secondary.)
On a interesting side note, Bitfinex, an exchange based in Hong Kong, is not on the ban list. Does that mean PBOC have no jurisdiction over Hong Kong? Can someone knowledgable verify this? If so, we should be seeing massive move to Hong Kong soon.
Mind you the Exchange-Run (like Bank-Run) will reveal the insolvency of some Chinese exchanges, which may trigger another crash, depending on the size of the debtor.
P. S.
I'll quote myself when one of my background homework revealed to be true:
Myth: Like Hong Kong, Shanghai Free Trade Zone respects rules
Reality: Hong Kong maintained its system because people defend it as a bottom line: it is not rules that worked, it is people that worked (to defend rules). Our government never liked that HK culture but cannot simply chop it. There is no similiar culture background in Shanghai. Shanghai Free Trade Zone is where various new things are allowed to live longer so that the government can see what kind of fruit it begets, which one benifits, which one isn't, and select what they want; chop off unwanted - like Special Economic Zone we had before. Hong Kong is a free trade zone, Shanghai Free Trade Zone is a controlled experiment. Like all experiment, you the bad seed are allowed to live longer because you are more closely watched. When they feels certain that your bad seed is weed, they won't let it grow.
