Bitcoin Value Steadies After Chinese Government Warning DropDecember 9, 2013 | Print | Comments | Category: Internet, Law & Policy, Security
Five Chinese government units, including the People's Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission, have jointly issued a notice about preventing risks against Bitcoin speculation.
Though the warnings were not full condemnations of the cyptocurrency, sell prices on exchanges as geographically diverse as China-based BTC China and U.S.-based Coinbase.com dropped by as much as 40% over the last few days, respectively. But in the past twelve hours, gthe value on these types of exchanges has appeared to level off at around a value of USD750 per bitcoin.
The government notice pointed out that Bitcoin is not a currency in a real sense and it does not have the equal legal position as a currency. Therefore, it shall not use and circulate as currency in the Chinese market.
The notice also said that financial organizations and payment organizations shall not set prices to their products and services with Bitcoin; they shall not buy, sell or trade Bitcoin as a central counterparty; they shall not implemented insurance businesses related to Bitcoin or include Bitcoin into the insurance coverage; and they shall not directly or indirectly provide other Bitcoin-related services to customers.
The five government units said this risk warning notice aims to protect the property rights of the public, safeguard the legal tender status of Renminbi, prevent money laundering risks, and maintain financial stability.
The notice clarified the nature of Bitcoin, which is a specific virtual product and it does not have the same legal position as currency. However, since the trading of Bitcoin is an Internet trading activity, ordinary people can continue to participate in it under the premise of this type of risk awareness.
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