China Injects $1T Liquidity—What It Means for Crypto?
The People’s Bank of China (PBoC) has cut the reserve requirement ratio (RRR) by 0.5 percentage points
While this might seem like a domestic monetary tweak, the ripple effects could reach far beyond China’s borders, especially into the crypto industry.
For crypto investors and newcomers alike, these shifts signal a new chapter in global capital flows and risk appetite. Understanding why central bank decisions like these matter is key to navigating today’s fast-moving digital asset markets.
Liquidity Is Fuel—and Crypto Is a Risk-On Asset
The reserve requirement ratio is the percentage of deposits that banks must hold in reserve. Lowering it frees up capital, encouraging more lending and investment. Combined with a lower policy rate—essentially the cost of borrowing for financial institutions—this move by the PBoC is designed to jolt economic growth.