A storefront decorated is with a Chinese national flag and red lanterns to celebrate the National Day in Beijing on Oct. 4.

Photographer: Yan Cong/Bloomberg

When the world’s financial markets hit turbulence, could you really turn to China’s yuan as a store of value?

The idea of the yuan as a refuge has gained some traction in recent weeks as it capped its best quarter in 12 years relative to the dollar. That label would put it on par with currencies traditionally deemed as safe in a market downturn, like the Japanese yen or Swiss franc.

In addition to dollar weakness, the yuan is being underpinned by a wide interest-rate premium over the rest of the world, as well as signs that China’s economy is recovering from the shock of the pandemic. But unlike a haven, China’s tightly-managed currency is gaining just as money flows into risk assets such as U.S. stocks or high-yield credit. In other words, it is strengthening in a relatively benign market.

Buying the yuan as a shelter from market volatility isn’t new: in 2017, the Chinese currency proved to be a better bet than the yen when North Korea fired missiles into the Sea of Japan. But history also shows it’s a risky strategy — when the yuan showed haven-like resilience in early 2018, it slumped to a decade low that year after the Trump administration slapped its first tariffs on Chinese goods.

Considering the policy risk in China and its capital controls, viewing the yuan as a haven will be inappropriate, according to George Magnus, research associate at Oxford University’s China Centre.

“The yuan can be considered a ‘good trade,’ which is a cyclical phenomenon and has nothing to do with haven status — the conditions for that are largely unfulfilled,”

A worker cleans units at a cryptocurrency mining farm. 

Photographer: Andrey Rudakov/Bloomberg

A slew of regulatory moves announced this week is positive for the famously free-market-oriented cryptocurrency space, according to Fundstrat Global Advisors LLC.

Developments like the U.K. Financial Conduct Authority banning the sale of crypto derivatives and the U.S. Department of Justice issuing an enforcement framework are beneficial in the long term because they will help reduce nefarious activity in the industry, according to a report by David Grider, Tom Lee and Ken Xuan.

They cited regulators “cleaning up bad actors” as also helping. The market’s focus on news that Square Inc. bought Bitcoin and Bitcoin’s ability to push past $11,000 show that crypto can power through these things, the report said.

“Actions unsurprisingly indicate U.S. and global regulators are committed to stomping out illicit activity, securities violations, money laundering, price manipulation, and noncompliance with banking regulations,” the strategists wrote. “On balance, we view recent news as a positive for crypto markets, despite select smaller pockets of risk, and we believe the prevailing bull market trend is intact.”

Bitcoin has moved back above $11,000 after a successful defense of the $10,000 level in early September. Crypto enthusiasts were also cheered by Square Inc.’s purchase of $50 million in Bitcoin in a bet by Chief Executive Officer Jack Dorsey that it will be an instrument of financial empowerment.

Bitcoin is rising for a fourth day and has retaken the $11,000 level

In other recent developments, the founders of crypto trading giant BitMEX resigned their executive roles after being charged by U.S. authorities with skirting laws preventing money laundering. Cybersecurity pioneer John McAfee, who had been promoting cryptocurrencies, was arrested in Spain on U.S. tax-evasion charges.

Fundstrat cautioned that some areas within crypto might be vulnerable given the regulatory trajectory.

“We do see select crypto market segments as more exposed to

By Byron Kaye

SYDNEY (Reuters) – Australian casino billionaire James Packer on Thursday said international tour operators helped Chinese gamblers circumvent Chinese capital controls, and that his company gave incorrect public statements distancing itself from the so-called junkets.

The Crown Resorts Ltd <CWN.AX> founder and one-third owner shared his perception of the travel agents who bring gamblers, often from China, to casinos at an Australian government inquiry. The inquiry is being held to determine whether the company should be allowed to run a A$2.2 billion ($1.6 billion) casino in Sydney’s tallest building.

So far during the inquiry, taking place just two months before the 75-floor tower’s scheduled opening, Packer has agreed that he sold a stake in Crown to Hong Kong’s Melco Resorts & Entertainment Ltd <MLCO.O> contrary to a ban on doing so.

In his third day testifying, Packer was asked about Crown’s relationships with junket operators after the company placed full-page advertisements last year attacking media reports saying Crown dealt with junkets linked to organised crime.

Asked if he knew China’s government had started limiting the flow of money offshore in 2013, Packer said he did. Asked if he viewed junket operators at the time as able to help Crown customers move money out of China, he said: “Yes I believe so”.

He said he never turned his mind to the possibility that junket operators were involved in money laundering. He said he had heard “rumours” about junkets being linked to organised crime but did not know if they were true.

In the newspaper advertisements, Crown described the media reports as “a deceitful campaign”, and said its only junket was Hong Kong-listed Suncity Group Holdings Ltd <1383.HK>.

The lawyer questioning Packer, Naomi Sharp, told the inquiry that Crown used at least four junkets at the time including one