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China Bitcoin Government The Almighty Buck

China Bans Financial Companies From Bitcoin Transactions 110

Posted by timothy
from the best-argument-yet-for-using-it dept.
quantr writes with this excerpt from Bloomberg: "China's central bank barred financial institutions from handling Bitcoin transactions, moving to regulate the virtual currency after an 89-fold jump in its value sparked a surge of investor interest in the country. Bitcoin plunged more than 20 percent to below $1,000 on the BitStamp Internet exchange after the People's Bank of China said it isn't a currency with 'real meaning' and doesn't have the same legal status. The public is free to participate in Internet transactions provided they take on the risk themselves, it said. The ban reflects concern about the risk the digital currency may pose to China's capital controls and financial stability after a surge in trading this year made the country the world's biggest trader of Bitcoin, according to exchange operator BTC China. Bitcoin's price jumped more than ninefold in the past two months alone, prompting former Federal Reserve Chairman Alan Greenspan to call it a 'bubble.' 'The concern is that it interferes with normal monetary policy operation,' said Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong. 'It represents an unofficial leakage to the current monetary system and trades globally. It is difficult to regulate and could be used for money laundering.'"
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China Bans Financial Companies From Bitcoin Transactions

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  • by gl4ss (559668) on Thursday December 05, 2013 @08:55AM (#45607117) Homepage Journal

    "The public is free to participate in Internet transactions provided they take on the risk themselves,"

    that should actually be a green sign.

    any method that can be legally used to turn yuan into something else that can be turned into money - and can be moved electronically - is in big demand...

    (no, I don't have any bc)

    • Re: (Score:3, Interesting)

      by Joce640k (829181)

      How come we only see bitcoin stories on slashdot?

      How come there's no stories about Litecoin, Namecoin, etc.? They both have "billion dollar" values, too.

      • by ackthpt (218170)

        How come we only see bitcoin stories on slashdot?

        How come there's no stories about Litecoin, Namecoin, etc.? They both have "billion dollar" values, too.

        Yeah, but Bitcoin is the new Honey Badger. I saw the sign along the Lawrence Expressway in Sunnyvale, California, so it must be true!

      • by JcMorin (930466) on Thursday December 05, 2013 @09:39AM (#45607469)
        Because other alt-coin are only copy/paste of Bitcoin, have no infrastructure and are less secure because they there is less miners. How many merchant accept Litecoin or Namecoin?
        • Re: (Score:2, Informative)

          by Anonymous Coward

          You realize Namecoin isn't a currency, right? It's a replacement of DNS...

  • by Saethan (2725367) on Thursday December 05, 2013 @08:56AM (#45607121)
    Yeah, btc took a momentary dive, and people jumped on it and it shot right back up above $1k. This all happened while I was asleep so *shrug*
  • by JcMorin (930466) on Thursday December 05, 2013 @08:58AM (#45607143)
    It's not banned at all, it's said that bitcoin can be freely buy and sell by the people but it's regulated like a commodity (gold, silver, oil) and there is no guarantee or protection from the standard financial institution. Bitcoin will actually benefit from a statement like that. Governments and Banks stay away from my bitcoin and leave the real free market work!
  • by Anonymous Coward

    It is difficult to regulate and could be used for money laundering.
    translation
    we can't tax it, and that is bad

    • by Anonymous Coward

      Bitcoin should be easy to regulate, since it does have a money trail. Even though the trail has public keys only, at some point someone will need to exchange/pay for goods with the private key. This means that the feds could place a watch, and see where the money is moving to for taxs/criminal activity purposes (something they can not do with cash). Check out this story on how $100 million in bitcoins were stolen, but the thieves have hard time spending it since the whole Internet community is watching wher

      • Re: (Score:3, Insightful)

        by mlts (1038732) *

        This might be a weakness of BitCoin eventually. As blockchains get longer and longer, it gets more unwieldy to keep everything updated.

        The closest thing is having to calculate every transaction (vending machine, gas station, bank, etc.) a Loonie [1] coin has been through since it was struck at the mint. Even though big-O is a linear function, after a while, the cryptographic calculations required for each transaction can add up over time, and when a BitCoin is broken into subunits, each subunit down to th

  • Did they also ban financial companies from tulip transactions?

  • by Anonymous Coward

    We all know the US is now run by crook like Wienerstein et. al. & they legalised shitcoin so it can be pilfered and pillaged in the customary rape-minded fashion as we saw in Denmark.

    That China is banning their use for serious transitions, and is the most responsibly run economy on the planet right now, speaks volumes.
    I don't think it has anything to so with control as attack minions/apologists will claim. China does nothing much to stop illegal pirating of movies, OS's etc.

    They just don't want their ec

    • "the most responsibly run economy on the planet right now"

      BWAaaaaHAHAHAHAHAHAHAHA! Oh wait, you're serious?

      Do you have any idea what the debt load is of the provincial governments? Do you even know that provinces and other lower levels of the Chinese government are taxing their constituents months, sometimes years in advance to try to maintain solvency?

      Do you know that the statistics on things like the expansion of electrical power usage do not line up in any even remotely sane way with the CCP's clai
      • by Jack9 (11421)

        Do you have any idea what the debt load is of the provincial governments? Do you even know that provinces and other lower levels of the Chinese government are taxing their constituents months, sometimes years in advance to try to maintain solvency?

        So what?

        Do you know that the statistics on things like the expansion of electrical power usage do not line up in any even remotely sane way with the CCP's claims of GDP growth and many economists believe that their rate of growth is now the same as the stagnant We

        • This is exactly what I'm talking about, the realities of economics in China as experienced by actual Chinese citizens. I tell you people are being taxed years in advance, and you say "So what?" Yeah, you really understand and care about what's happening in China. Hell, you'd fit right into the Chengguan, which you probably don't even know anything about without looking it up.

          GDP should contain movie production costs. Do you even know what GDP is? What makes you think making a movie and selling it is ultim
          • by Jack9 (11421)

            > Yeah, you really understand and care about what's happening in China. Hell, you'd fit right into the Chengguan, which you probably don't even know anything about without looking it up.
            > GDP should contain movie production costs.
            > What point is there on zooming in on x or y industry? Sure there are growth sectors in any country, but we're talking about aggregates.

            The majority of this post is not on the point we were discussing. As I understand it, the topic was the relative fiscal responsibility o

            • -_-

              You dismissed out of hand real conditions in China, which I addressed, because they're like, you know, the fucking topic.
              YOU brought up the topic of movie production being included in GDP. I addressed it because YOU brought it up, asshole.
              I brought up specifics vs. aggregates because YOU started talking about the steel industry for no reason.

              I addressed YOUR points, which often were off the original topic, and you fault ME for addressing YOU?

              Then you foe me. Wow. That's special. Consider it mutua
  • by ananaMous (1478083) on Thursday December 05, 2013 @09:29AM (#45607377)
    ... & they can't have that, now, can they? The push here seems to be to decouple the yuan in any big way from their own currency markets & see how that goes. As long as it means a low yuan, that might be fine by them. But then one yuanders: who really has the pretend currency?
  • All money is nothing more than an abstract representation of value. It was created to ease trade (to overcome limitations of barter). And the only value in this abstraction we call money is the agreed upon use of it. Problem is, all of this abstract value representation has been abused so badly that it no longer is a genuine honest representation of the real values its supposed to represent. The proof is obvious, once its realized that with all the bankruptcies there is not a single person that can show me

  • ...and it's still higher than what I sold the last of my BTC for.
  • by gman003 (1693318) on Thursday December 05, 2013 @10:48AM (#45608239)

    Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

    So it is a *good* thing for some of those banking institutions from being prohibited from using Bitcoins. And really, banks do not need to be dealing with Bitcoins - do you really want a bank to be taking your money and "investing" it in Bitcoin?

    Classifying it as a commodity, like gold or silver, for regulatory purposes makes sense, and much like there are few regulations on gold and silver themselves, these are regulations on the banks, not on Bitcoins.

    Now, the anti-money-laundering stuff may be a cumbersome burden on Bitcoin exchanges, and tries to defeat the entire purpose of Bitcoin's pseudonymity, but the US already has similar restrictions, and they're not restrictions that are completely unreasonable. In fact, wouldn't regulations on converting Bitcoins to and from other currencies make people more inclined to use Bitcoin as an actual currency, instead of just a carrier system for other currency (the buyer buying BTC to immediately spend, and the seller immediately converting it back to a "usable" currency)? Even their attempts to undermine it seem likely to strengthen it.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

      oh wait your serious...

      Bitcoin is pure speculation at its finest. When it crashes (and it will). You may want to change your tune.

      Gov controlled money was created to stop fluctuation in price (it works to a degree). Price along the lines of I dont know if I can buy a loaf a bread today or a Ferrari. Everyone pretty much demanded the Gov do *something* anything. They lucked into the particu

    • by Anonymous Coward

      You forgot c) to profit from the scam.

    • Bitcoin exists because people can mine by themselves.

      Have massive spare computing power? Make essentially free money!

      Very few people want to put down $1000 to by that virtual thing that can crash any second now. But a lot will play if they don't have to put money down.

    • by ultranova (717540)

      Bitcoin exists because many people don't trust a) the major world governments or b) the major banking institutions.

      That's part of it, but there's another reason: Bitcoin is simply the fastest, most convenient and secure way to send and receive payments over the Internet. No need to submit your credit card information, no waiting for wire transfers to complete, no worries about PayPal suddenly deciding they don't like your business and freezing your funds.

      Bitcoin has an ecological niche in the Internet age

  • A lot of nootropic (supplements for better mental function) purchases are made with bitcoin in China. I hope this doesn't ending making things more difficult.

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