I'm going to believe that will happen soon. However, right now, it seems to me that Bitcoin is really just going "SHIFT".
We have countries like Cyprus yanking money out of banks, so you get some people shifting their money out of country. So, what does it matter what a bitcoin costs if you are going to launder some cash out? 1:1 is a fabulous laundering rate.
Buy 200 Euro worth of Bitcoin from an account in Cyprus -> Instantly (or asap) sell for 200 Euro to an account in London. The current price doesn't matter as long as you exchange fast enough or at a profit.
How is someone in Cyprus going to buy bitcoins? If the exchange is out of the country, then it doesn't help, because you already have to move the money out of the country to get it to the exchange. If the exchange is within the country, then the rate offered is likely to be far less favorable than elsewhere in the world, because demand is higher.
There needs to be at least two things to exchange.
Let's assume that bitcoin is the only way to move money in or out of the country. Let's further assume that a purported arbitrage opportunity arises: The hypothetical Cypriot bitcoin exchange is selling bitcoins for 200EUR, while other exchanges are selling them for 100EUR. So you:
Buy bitcoins on other exchanges for 100EUR each. Sell those bitcoins on the Cypriot bitcoin exchange for 200EUR each. You've now doubled your money.
Except your money is now trapped in Cyprus. You can't get it out directly. The only way to get it out is to use bitcoins. Because you can't move the money directly, the only way to convert your Cypriot euros into bitcoins is to buy them on the local exchange, for 200EUR each. If you do that, then you're back where you started, minus whatever transaction fees you incurred.
For arbitrage to equalize exchange rates across exchanges, you need to be able to move both currencies involved. If you disagree, then please outline your procedure for how you'd make money in the scenario given.
