| In the past few years,the price and volume of Bitcoin have risen sharply,from few cents in the very beginning to the peak of nearly 20,000 US dollars.The highest annual increase has reached a shocking 21.67 times,the total market value reached a maximum of 326.502 billion US dollars.Although the popularity of Bitcoin is declining at present,the phenomenon of using Bitcoin for illegal activities still exists,and the situation against such crimes is still grim.Capital flight may seek the cryptocurrency that combines anonymity,decentralization and regulatory difficulties,making Bitcoin an “underground highway for exchange”(Zhang,2018).How much have the capital flight via Bitcoin happened? We gave the answer for the first time: It is estimated that the scale of capital flight before September 2017 may be higher than 0.51 trillion Chinese yuan,of which there are also 6.558 billion yuan with conclusive evidence.Although Bitcoin has withdrawn from the historical arena in China after the regulatory storm in September 2017,the hidden dangers of capital flight via Bitcoin still exist,and its over-the-counter trading is almost out of control and has the potential to form a serious abnormal flow of short-term international capital.Moreover,cryptocurrency has been legalized in some countries and has been continuously innovated,which poses a new threat to the control of capital flight in China.In this context,systematically studying the problem of capital flight via Bitcoin has important practical significance for restraining capital flight,stabilizing financial order,and resolving financial risks.The research is carried out in the following aspects:First,from the definition of connotation,cause inquiry,channel investigation,estimation method,cost analysis and regulatory measurement,it summarizes the research progress in the field of capital flight;from brief introduction,attribute dispute,original crime and chaos,regulatory policy,it summarizes the development and research frontier of Bitcoin;the problem of capital flight and capital control from the perspective of Bitcoin is a new field that is rarely involved,and the related literature is scarce.We have detailed the literature in this field;A brief summary and targeted review of the above literatures is made,pointing out the shortcomings of the literature on capital flight and capital control from the perspective of Bitcoin,and combined with the research to propose useful improvements.Second,Bitcoin is introduced as a currency into an open economic framework based on the Schilling and Uhlig(2018)model.The existing literature failed to introduce Bitcoin into the open economy,and we have made a useful attempt.Based on this model,we have obtained some meaningful conclusions: First,the purchasing power of Bitcoin at home and abroad is consistent,which fits the no-arbitrage theory and the one-price law of Bitcoin;Second,the capital control of the fiat currency will make domestic Bitcoin prices have risen,which explains the relationship between capital control and Bitcoin premium from a trade perspective;Third,Excessive Bitcoin outflows bring domestic Bitcoin price increases and welfare losses,which is capital flight and Bitcoin premium.The connection between the models provides a portrayal of the model.Thirdly,Bitcoin is introduced as a commodity,and a simple model framework is introduced.The model is used to analyze the risk fluctuation,Bitcoin premium and capital flight during the 811 RMB Exchange-rate Regime Reform period.In the field of theoretical models,all the literature introduces Bitcoin as a currency,but the introduction of Bitcoin as a commodity into the model is more in line with the definition of Bitcoin in China's regulatory policy.We have made meaningful explorations: First,we build domestic and foreign Bitcoin theoretical model of commodity supply and demand,introducing arbitrage trading and capital flight,solving and characterizing the premium level,capital flight and arbitrage trading volume,and using the model to conduct Bitcoin premium fluctuations from the perspectives of regulatory factors,Bitcoin market factors,and emergencies.The mechanism explained and enumerated the examples.Secondly,from the perspectives of exchange rate synergy,premium jump,quotation consistency and domestic premium convergence,the pulsating gain characteristics of the Bitcoin premium after the 811 RMB Exchange-rate Regime Reform were proved.Finally,with the above theoretical model,we explains the mechanism of the 811 RMB Exchange-rate Regime Reform,risk fluctuation,capital flight and pulsating gain characteristics of Bitcoin premium.Fourth,the typical facts,empirical evidence and scale calculation of capital flight via Bitcoin were studied.First,it sorts out the typical facts of capital flight via Bitcoin,and analyzes the capital flight under the natural experiment of the emergencies and regulatory policies,and rebuts the voice of doubt.Secondly,we propose the evidences of capital flight via Bitcoin from two aspects: First,cross-border arbitrage between onshore RMB,US dollar and Bitcoin drives capital flight;Second,the cost of capital flight via Bitcoin is lower and capital flight via Bitcoin faces less control than traditional channel.Evidence from these two aspects confirms the existence of capital flight via Bitcoin.Finally,with the clustering and naming mechanism of WalletExplorer,the crawler crawls 2,589,100(total amount of 109.04 billion yuan)transaction data of the blockchain records.We find a well-documented capital flight transaction of 6.585 billion yuan,mainly to the United States and China's surrounding areas.It is estimated that the amount of capital flight via Bitcoin is between 0.51 and 3.03 trillion yuan.Fifth,we examine how cost factors have driven capital flight to the Bitcoin channel.The results show that both absolute cost and relative cost advantage have significant explanatory power for capital flight trading shares,and lower capital flight costs have a significant driving force for capital flight via Bitcoin.This conclusion,while supporting the views of Cheung and Qian(2010)and Brada(2011),extends the evidence to a more detailed level of daily frequency data.The conclusion is still valid after controlling for the accident index,panic index,relative activity and global attention.We also found that domestic and foreign risks have an impact on the share of capital flight transactions via Bitcoin,especially when the market is extremely volatile,but there is a time lag in cross-market transmission of this risk.By using the cost variable after the correction time mismatch,the full sample cost variable containing the outliers,and the cost variable with the lagging period 1,we have done the robustness test.We have also controlled the possible endogeneity.Sixth,the Guarding Against the Risks of Bitcoin promulgated on December 5,2013 was evaluated.It is considered that the policy has not effectively curbed the capital flight via Bitcoin.Firstly,from the definition of capital flight and the definition of arbitrage trading,the Wilcoxon symbol rank test of premium,and the correlation of transaction volume,the research of Ju et al.(2016)is discussed again,and the conclusions are open to be discussed.Secondly,In the regression of the cost factor to the share of capital flight transactions,the horizontal term of the policy dummy variable and the cross term of the cost variable are introduced to re-evaluate the effectiveness of the policy.The result does not support the conclusion that the policy is effective.Finally,the Bitcoin boom cultivates arbitrage trading,and the policy promulgation has the time coupling with Bitcoin boom,from these two perspectives we explain the conclusion that the premium after the policy was promulgated significantly in the Ju et al.(2016)study.The conclusions show that the Guarding Against the Risks of Bitcoin has not effectively curbed the capital flight via Bitcoin.The Bitcoin boom at the end of 2013 gave birth to mature arbitrage transactions,driving a significant reduction in the Bitcoin premium,the Bitcoin boom and policy promulgation is close in time,but there is no direct connection between them.We conducted a systematic study on the capital flight via Bitcoin,and made meaningful explorations in the following aspects,and made possible marginal contributions: First,this article may be the first bit to be recorded in the blockchain ledger,based on which it estimates the scale of capital flight via Bitcoin and links it to the exchange price data.Second,this paper may be the first in empirical research to compare Bitcoin data with other macroeconomic variables without down-clocking variables.Third,this article may be the first to introduce Bitcoin into the open economic framework theory model,and the first to introduce Bitcoin as a commodity into the open economic model framework.Fourth,this paper may be the first document to study the difference of capital flight cost and capital control between Bitcoin channel and traditional channel.In addition,this paper may be the first research to focus on asymmetric capital control via Bitcoin capital flight.Fifth,this article is about the problems of capital flight via Bitcoin,a field rarely studied by scholars,we has systematically studied a number of issues and enriched literatures in this field.In view of the problem of capital flight via Bitcoin and the chaos of various digital currencies,we believe that the control of cryptocurrency is necessary.It is recommended to carry out work in four aspects: focusing on research,strengthening monitoring,improving legislation and deepening cooperation.The fence of capital control should be tightened in the cryptocurrency market,thereby restraining capital flight,stabilizing financial order,and defusing financial risks. |
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