ok guys calm down the whole story is covered now at coindesk, there is no bad thing about the statement people are just panicking because of the media bad coverage which is nothing new
read the full article here
http://www.coindesk.com/price-crashes-china-outlaws-bitcoin-financial-institutions/the price of bitcoin fell over $300 this morning after China’s central bank warned financial institutions to steer clear of the digital currency.
According to the bank, it doesn’t consider bitcoin a threat to China’s financial system, but it does believe the digital currency carries risks.
“The concern is that it interferes with normal monetary policy operation,” Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong, told Bloomberg.
“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. I think the central bank is right to make this move,” he added.
The central bank justified its position by stating that its goal is to prevent money laundering and other risks associated with bitcoin. Aside from the warning, the bank has stated that it will require all trading platforms that trade in virtual currencies to register with authorities.
While the central bank is telling the nation’s banks not to deal with bitcoin, it said individuals are free to buy, sell and use bitcoin, if they wish, but they must take on the risk themselves.
On a positive note, the bank didn’t ban trading platforms, such as BTC China, from dealing with bitcoin and other digital currencies, it merely said these companies have to register with authorities.
Although the bank clearly stated that it will allow individuals to freely use bitcoin, the announcement has already caused a massive price drop on several exchanges, namely BTC China. In heavy volume trading earlier this morning bitcoin lost roughly ten percent of its value in a matter of hours.
The opening price on BTC China was 7,005 CNY, but it quickly shed more than 10 percent, with the lowest bid coming in at 4521 CNY. At press time the latest price on CoinDesk’s Bitcoin Price Index was $889.01, with a daily change of -22.5 percent, or $257.23.
Although the total value of bitcoins in circulation is dwarfed by national currencies, Chinese authorities seem to be taking the issue very seriously. Many Chinese citizens are investing their savings in bitcoin and some even argue they are basically hoarding the currency. This also represents a risk in terms of price fluctuations, as many speculators have no qualms about leaving the market at the first sign of trouble.
The latest government notice effectively prohibits financial institutions and payment institutions to place bitcoin prices on products or services. They cannot be involved indirectly, either. They are barred from providing bitcoin related services, such as registration, trading or clearing. Moreover the decision to introduce compulsory registration could have a far reaching impact on China-based trading platforms.
The notice mandates all trading platforms to register and it also brings up the potential use of China’s anti-money laundering legislative framework to identify all customers and suspicious transactions. The notice states that the measure will “effectively prevent money laundering associated with bitcoin.”
The notice went on to state that bitcoin is not legal tender and that it is “specific form of virtual goods” without a clear legal status and monetary equivalent. It described bitcoin and other virtual currencies as a potential risk to the public interest and the Renminbi, due to excessive speculation. It also called on authorities to do more to educate the public about virtual currencies in order to provide them with a better understanding of such currencies and the risks associated with them.
The central bank also stressed that it will continue to pay close attention to bitcoin price fluctuations in the future.
Stay tuned for more updates to this story.
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