However, general public may trade bitcoin on the internet by taking their own risk.
How is that not uber-bullish?
Because if merchants aren't allowed to accept it as currency then that is a major blow for bitcoin adoption in China. However it's not clear to me if that is the case.
Who said merchants were not allowed to accept it as currency?
From the 'human translation' on reddit:
http://www.reddit.com/r/Bitcoin/comments/1s5hzl/my_human_translation_of_the_china_regulation/"Bitcoin is a specified virtual commodity, it does not have equal legal status with
money currency, and it cannot and should not be used as
money currency on the market."
Note the important correction.
That could be interpreted to mean that any Chinese business should not treat bitcoin as money currency i.e. not accept it as payment like they would if it were a currency.
My father is a former West Coast division head attorney for Exxon. I appear to have inherited some of his high IQ ability to interpret the law.
I can't find anything in this document that specifically bans the bolded assumption.
This document is merely stating that Bitcoin will not be allowed to circulate widely as a currency to compete with RMB,
because all volatility risk will remain outside the financial sector in the private parties and exchanges. It is very free market way of saying Bitcoin will not be backed by the government's system. There is nothing stopping businesses from accepting it, and converting it to RMB via a registered exchange.
The government will not likely clamp down on small scale acceptance, as it presents no credible threat to RMB. As we all see now, businesses are forced to convert to fiat immediately if they have significant expenses in fiat, i.e. Bitcoin presents no threat to fiat at the moment because of its volatility and the need for businesses to have fiat to pay their employees and operating expenses, etc..
Note small scale in China is big scale relative to current Bitcoin market size given the large population. Bitcoin is only in the tens of $billion range of market cap. Fiat finance is in the hundreds of $trillions. Bitcoin can grow immensely while still being small scale relative to fiat finance market size.
Whereas, (small) businesses could keep their profits in BTC, as easydns did (PenAndPaper username). Of course big businesses can't because the Bitcoin market cap is too small any way, besides big businesses are not into such risk.
The document is saying that non-financial entities must accept risk of holding BTC.
So this does not to stop the trajectory of Bitcoin in China. Exchanges can still operate and are not prevented from having a bank account to operate with. The document only bans financial institutions (and payment providers) from being market makers, underwriting, insurance, etc. In other words, all the risk and market making must be done by individuals and exchanges.
What they have done is simply kept Bitcoin in the free market-- the wild west.
This is an extremely bullish outcome. They have clarified that Bitcoin is legal for its small scale free market functions.
The Baidu thing is very suspicious. They accepted for a very small portion of their business which was misunderstood and caused a euphoria, then they dump when people misunderstand the ruling above, in order to create panic. Looks like some manipulators are getting rich on BTC pump & dump & rebuy on the dump.
