China bans financial firms from Bitcoin trading

E-commerce

by CBR Staff Writer| 06 December 2013

Chinese individuals are still allowed to use virtual currency for online purchases.

The People's Bank of China (PBOC), financial watchdogs and the country's IT ministry, have jointly issued a notice to ban all the financial institutions including banks from handling Bitcoin related transactions amid fears of money laundering.

Citing Bitcoins not being supported by any countries or central authority, Chinese regulators also considered strengtnen efforts to curb using Bitcoins.

According to the central bank, Bitcoin is a certain virtual product, which does not have the same authorised status as of the currency, and it cannot and should not be spread and used in the market.

However, the PBOC gave green light to its citizens to trade in bitcoins for buying and selling activity on the Internet, while warned them of the risks involved, adding that it considered formalising the law of exchanges that dealt in the virtual currency.

The value of the virtual currency plunged amid reports of being banned by China, which has been the biggest Bitcoin market in recent months.

Launched in 2009, Bitcoins are created digitally and stored in a virtual wallet, while there have been rising concerns globally over the money in the midst of queries about rule and the potential for scam and abuse.

Recently, the value of Bitcoin surpassed the $1,000 (£613) mark, almost four times rise in three weeks and for the first time since its launch.

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