'Offshore yuan' (CNH) refers to the amounts of Chinese yuan (CNY), also called renminbi (RMB), available for trade on international markets by businesses, usually at slightly higher value than the official version thanks to the added accessibility.
Offshore yuan is the fourth fiat currency offered for trading on BTC-e, the others being US dollars, Euros, and Russian rubles. It also allows trading between these currencies, as well as bitcoin and a selection of seven alternative cryptocurrencies including litecoin, namecoin and peercoin. To fund a BTC-e account with CNH, users must wire money via a National Australia Bank (NAB) account in Sydney.
Limited trade only
Thanks to strict capital controls, yuan is not freely tradable on world forex markets and its value is more rigid. It is not legal tender in Taiwan, Hong Kong or Macau, but often accepted and banks there offer yuan-denominated accounts. Hong Kong started the first offshore market in 2004.
The Chinese government has allowed the yuan to float within a limited range since 2006, when a US dollar peg was removed.
Bitcoin another option
These controls are often listed as one of the main reasons for bitcoin's popularity with speculators and wealthy investors in China – it offers them a far easier option to move money out of the country, trade it into another more liquid currency and invest in a wider range of foreign alternatives. Investment opportunities within China itself are limited largely to real estate or to a lesser extent, shares in local companies.
Despite reports last week that the People's Bank of China (PBOC) was about to clamp down with a complete ban on banks doing business with bitcoin exchanges, companies there have reported no official announcement yet. Still, the international bitcoin price fell below $500 after the news and remains around $445.
BTC-e is one of the world's three most popular bitcoin exchanges, and also the least compliant in the traditional financial sense, requiring only an email address to open an account and trade in any of the available currencies. Funding accounts with fiat is tricky, however, without going through a more compliant bank or payment processing company.
Yuan & dollars image via Shutterstock
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