China's central bank has halted government bond purchases to combat the depreciation of the yuan (CNY), which has been losing value amidst declining bond yields. This move, announced by the People's Bank of China (PBOC), aims to address the imbalance of demand and supply in the bond market. As the 10-year Chinese government bond yield dropped below 1.6%, a notable decline of 100 basis points over the past year, concerns grew about the depreciation's impact on capital flight. Analysts previously suggested that the sliding yuan could benefit digital currencies like bitcoin (BTC) as investors seek alternatives amidst monetary instability. The CNY now trades at approximately 7.32 per USD, continuing a three-month downward trend, influenced by escalating trade tensions and political changes in the U.S. under President-elect Donald Trump.

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