Menu
China bans banks from trading in Bitcoin

China bans banks from trading in Bitcoin

The Bitcoin has been growing in popularity in China as a new kind of investment

The price of bitcoins may be soaring, but China isn't too thrilled with the virtual currency. On Thursday, the nation moved to regulate use of bitcoins, stating that its financial institutions could not deal in the virtual currency.

"The bitcoin is a special kind of virtual product, it does not have the same legal status as a currency," authorities said in an online posting. "It should not and cannot be used as a currency circulating in the market." The posting came from the nation's regulators, including the People's Bank of China and the ministry that oversees the tech sector.

To regulate bitcoin usage, China will implement anti-money laundering measures with sites that exchange the virtual currency. This includes obliging users to register with their real identities.

China's main objection to Bitcoin is that the cryptocurrency is not controlled and issued by a central monetary authority; the government posting also expressed concern that the number of bitcoins is limited, though it did not say why that's a problem. Another issue for the Chinese is that transactions with the currency can be done anonymously.

China said the public would be free to use bitcoins as long as individuals take on the risk. But authorities are particularly concerned with the virtual currency's volatile price and how some bitcoin sites are not legally registered.

"Some sites have poor security and safeguards, and can easily experience hacking attacks or the site's operators will abscond with the money," authorities said in a separate posting.

The bitcoin has been trading at more than US$1,200 over the past few days, according to the Tokyo-based Mt. Gox exchange. But following China's announcement, the price fell under $1,000.

Bitcoin is becoming increasingly popular in China and a few online vendors, including a site from search engine Baidu, have been accepting the currency in recent months, said Bobby Lee, CEO of BTC China, a Bitcoin exchange in the country.

"So far, the Chinese people are choosing bitcoins as a digital asset for savings," he said in October. "With the potential for significant price appreciation in bitcoins, people here are buying it as an alternate form of investment."

China announced the new measures after local police recently detained three people for allegedly scamming Bitcoin investors through an online exchange, reported state press, the Xinhua News Agency. The exchange had attracted 4,493 users, but the site's operators abruptly shut it down in October, keeping all the assets.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags Internet-based applications and servicesregulationPeople's Bank of Chinagovernmentinternet

Featured

Slideshows

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Examining the changing job scene in the Kiwi channel

Examining the changing job scene in the Kiwi channel

Typically, the New Year brings new opportunities for personnel within the Kiwi channel. 2017 started no differently, with a host of appointments, departures and reshuffles across vendor, distributor and reseller businesses. As a result, the job scene across New Zealand has changed - here’s a run down of who is working where in the year ahead…

Examining the changing job scene in the Kiwi channel
​What are the top 10 tech trends for New Zealand in 2017?

​What are the top 10 tech trends for New Zealand in 2017?

Digital Transformation (DX) has been a critical topic for business over the last few years and IDC is now predicting a step change as DX reaches macroeconomic levels. By 2020 a DX economy will emerge and it will become the core of what New Zealand industries focus on. From the board level through to the C-Suite, Kiwi organisations must be prepared to think and act digital when the DX economy emerges in 2017.

​What are the top 10 tech trends for New Zealand in 2017?
Show Comments