Chinese Officials Ban FI Use of Bitcoin (Dec. 5, 2013)
Chinese officials today have banned financial institutions in the country from using Bitcoin as currency, asserting that bitcoins are merely virtual goods that have no status as legal tender.
The government agencies, which include the People’s Bank of China (PBOC), the Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission, banned the virtual currency “to protect the property rights and interests of the public, to protect the legal status of the Yuan currency, to prevent money laundering risks and maintain financial stability,” according to a translated statement on the PBOC’s Website.
Chinese citizens are allowed to participate in Bitcoin commodity trading at their own risk, according to the notice. Bitcoin’s value reportedly fell approximately $100 today to around $1,100.
The currency and its supporters have seen mixed success around the world in terms of government acceptance. For example, Germany recognizes it as currency enough to declare that citizens are required to pay capital gains on Bitcoin income. A Bitcoin ATM in a Canadian coffee shop has exceeded CAD$1 million in volume less than 30 days from its installation.
Earlier this year, the U.S. Treasury Department’s Financial Crimes Enforcement Network said virtual currency administrators and exchanges are required to meet money transmitter regulations. And, last month, two U.S. Senate committees held hearings to learn more about decentralized virtual currencies. Check out next week’s Pay Update for more on the Senate hearings.