There’s one country where people probably won’t need much persuading to join the bit-craze.
1. They’ve already done the whole virtual currency thing—with Q Coin.
Or at least 100 million of them did. Back in the mid-2000s, internet company Tencent launched Q Coins, virtual currency with which users could buy items for their avatars. Tencent accepted points won by online gamers in exchange for Q Coins, making it a virtual central banker of sorts since it was issuing Q Coins without hard-currency backing. And users started exchanging Q Coins among themselves, and since they were untraceable by the Chinese government, Q Coins began being used for black market transactions. Eventually Q Coin trading volumehit several billions of yuan per year, rising at 15-20% annually. China’s central bank worried that Q Coins could be used to launder money and to inflate asset bubbles. The government eventually cracked down, banning, among other things, the exchange of “virtual currency” between user accounts.
2. As a medium of exchange, bitcoin could help Chinese people evade currency controls.
China’s capital controls make it extremely hard for to buy stuff beyond China’s borders—most online stores don’t accept yuan or Chinese payment systems, and there are limits to what they can exchange into foreign currency. As bitcoin markets develop overseas, Chinese bitcoin owners could in theory change it into currencies that sites like PayPal, Amazon, etc., accept. Right now bitcoin (比特币, or bitebi) commands somewhere between 600 and 700 yuan at the time of this writing. Those who wish to trade it can get started on Taobao or Paipai.