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China banks ban Bitcoins - virtual currency hits slump

By Catholic Online (NEWS CONSORTIUM)
12/9/2013 (3 years ago)
Catholic Online (www.catholic.org)

Bitcoins don't 'possess the same legal status as currency - and should not be circulated and used in the market as such'

Bitcoins, the trendy virtual currency that is enjoying popularity in many parts of South America has hit its first major roadblock. China has banned its banks from providing related services and products for the item. 

Chinese banks and other financial organizations are banned from providing bitcoin-related services and products.

Chinese banks and other financial organizations are banned from providing bitcoin-related services and products.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
12/9/2013 (3 years ago)

Published in Business & Economics


LOS ANGELES, CA (Catholic Online) - While Bitcoins have made fortunes for some, China has taken steps to limit its usage. China has become the biggest Bitcoin market in recent months as buyers seek to profit from speculating in the currency.

Prices on BTC China, the country's biggest Bitcoin trading platform -- which had stood at around $1,100 in U.S. dollars each -- plunged by more than a third to an intra-day low of 4,523.12 yuan. The drop wiped more than $5 billion off the total value of the 12 million-odd Bitcoins currently now in circulation.

"Bitcoin is a certain virtual commodity, does not possess the same legal status as currency and cannot and should not be circulated and used in the market as such," the People's Bank of China said in a statement.

Furthermore, Chinese banks and other financial organizations are banned from providing bitcoin-related services and products. The Chinese Central Bank also called for enhanced control of online trading platforms for bitcoins in order to defend against the possibility of money-laundering.

Pointing out investment risks faced by the public, the Chinese bank said that "ordinary people, under the premise of voluntarily shouldering the risk, have the freedom to participate in bitcoin trading as a kind of buying and selling activity on the Internet," it said.

Bitcoins were launched in 2009, the invention of a mysterious computer guru who goes by the pseudonym Satoshi Nakamoto. Bitcoins are digitally created and stored in a virtual wallet, allowing users to remain anonymous.

Concerns have increased internationally over the money amid questions about regulation and the potential for fraud and abuse.

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