China Bans Financial Companies From Bitcoin Transactions

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.'"

Re:The public is free to participate in Internet t

[ElectricTurtle]

I'm not sure how that's supposed to mean anything... you do realize that the USN makes the PLAN look like a handful of plastic boats in a kid's bathtub right? Compare fleet compositions someday. We have so many carriers we can't even field them all, and the PLAN just barely manages to field one, which has never even seen combat.

The PLA and PLAAF are sizable, formidable forces, and a land war with China would be a nightmare, but the PLAN is a joke, at least to the US. To the small navies of its neighbors, it's serious business, but then they all ultimately depend on US intervention for defense anyway. SEATO4EVAR

Re:Does it mean,

[Anonymous Coward]

/CSB: October of last year, 2012, I bought ~55 BtC at $12 each ($650). Just cashed out 20 ($20,240) for Xmas vacation and gifts and have a remaining 25 (~$27,500), that if they dropped back to $12 or completely disappeared overnight, I'd still be waaaaay ahead of what I earned at my 8-5 or would have gotten from any other investment. *Past results are no indication of future performance.

While you were beating your anti-BtC drum, how's that 401k doing for you? How's your market stability? Returns over time? How much "full faith" do you have in the companies in your portfolio? Any oil stocks in there? Who's gonna have the next major spill and fine from the EPA?

BtC is still REALLY early in it's run. We're still talking about buying and selling actual WHOLE BitCoin! My god! The whole design of BitCoin is that by the time the mining runs out ~2020, most transactions will be in Satoshi... that's 0.00000001 BitCoin. When 1 Satoshi = $1, the BtC economy will be (I've heard, but not calculated) multiple times larger than the sum of all other currencies in circulation. It'll also mean that 1 BtC =~$100,000,000. As far as the reality of those prospects, do some research on deflationary currencies. As long as there is a market, the value can't help but go up.

As far as a market being available, since almost anything [spendbitcoins.com] can currently be purchased directly with BitCoin, including Gold and Silver [coinabul.com], Porn [pornsterr.com], and just about any major retailer's gift cards [giftcardzen.com], including Target for groceries, I think it has a reasonable chance at a long run. The biggest question has always been if the big financial institutions (FI) would see BtC as a threat or opportunity. If it's a threat, then they will have their government minions crack down on it and it'll go away. If it's an opportunity, (and the testimony before congress last month seems to indicate this is the way the FI want it played by the Fed Reserve), then they will keep it alive as a market to milk to and manipulate for a long time to come.

Re:The public is free to participate in Internet t

[Anonymous Coward]

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