China is considering injecting one trillion yuan (about $142 billion) into its largest banks to support its slowing economy. This initiative aims to boost the banks' lending capacity and stimulate growth amidst weaker economic performance.

The funding will come from new sovereign bonds, marking the first major capital injection since the 2008 global crisis. Despite previous economic interventions, Chinese banks face dwindling profits and rising bad debt.

Economists suggest that this fiscal aid could stabilize the banks and ensure their lending capabilities remain unaffected, even as property prices decline. There's also speculation that the increased liquidity will benefit riskier assets like Bitcoin and stocks.

China's regulators are urging banks to offer cheaper loans to risky borrowers. This aligns with the potential for increased spending and investment, which historically benefits assets like Bitcoin. Crypto advocate Su Zhu and economist Lyn Alden note that global liquidity often influences Bitcoin's price, hinting at a possible surge.

However, China's 2021 crypto ban complicates the scenario. Despite the ban, Chinese traders reportedly continue to invest heavily in Bitcoin via over-the-counter brokers, indicating a persistent anticipation of crypto gains.