Don't panic, China is NOT banning bitcoin

[jl2012]

The original announcement is here. I will translate it but please give me a few hours.

http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2013/20131205153156832222251/20131205153156832222251_.html

In order to protect the property rights and interests of the public, to protect the legal status of the Chinese yuan, to prevent money laundering risks, and to maintain financial stability, the People's Bank of China, Ministry of Information Industry, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission jointly issued a "Notice on guard against the risk of bitcoin".

The "Notice" clarifies the status of bitcoin. It states bitcoin is not issued by a monetary authorities and is not a mandatory legal tender, and therefore is not a real currency. By its nature, bitcoin should be a specific virtual commodity, and does not have the legal status of currency, cannot and should not be used as currency on the market. However, general public may trade bitcoin on the internet by taking their own risk.

The "Notice" requires, at this stage, financial institutions and payment institutions may not denominate product or service in bitcoin, may not trade bitcoin, may not act as a central counterparty in bitcoin trading, may not offer insurance product associated with bitcoin, may not provide direct or indirect bitcoin-related services to customers, including: registering, trading, settling, clearing services; accepting bitcoin  or use bitcoin as a clearing tool; trading bitcoin with CNY or foreign currencies; storing, escrowing, and mortgaging of bitcoin; issuing bitcoin-related financial instructments; using bitcoin as a investment target for trusts and funds.


TBC

[LightRider]

Please, panic, I'm looking to score cheap coin!

[CIYAM]

My wife has been translating some of it to me and it doesn't sound very good (although I'd agree what we are seeing is some "panic" selling)..

It seems for individuals to buy or sell Bitcoins is fine but it's beginning to look like businesses will not be able to do business using BTC in China with the biggest concern for Chinese investors probably being whether btcchina could be forced to cease business (nothing was specifically stated about that or any other Chinese exchange though).

[bryant.coleman]

It is looking quite worrisome to me:

At this stage, financial institutions cannot denominate services and products in bitcoin, cannot trade bitcoin, cannot run bitcoin exchange, cannot provide bitcoin related services, cannot store bitcoin for clients, cannot establish bitcoin trust or fund, etc.

[oakpacific]

It is looking quite worrisome to me:

At this stage, financial institutions cannot denominate services and products in bitcoin, cannot trade bitcoin, cannot run bitcoin exchange, cannot provide bitcoin related services, cannot store bitcoin for clients, cannot establish bitcoin trust or fund, etc.

Obviously, what were you expecting a "financial institution" to do?

[bryant.coleman]

It is looking quite worrisome to me:

At this stage, financial institutions cannot denominate services and products in bitcoin, cannot trade bitcoin, cannot run bitcoin exchange, cannot provide bitcoin related services, cannot store bitcoin for clients, cannot establish bitcoin trust or fund, etc.

Obviously, what were you expecting a "financial institution" to do?

Financial institution just doesn't include banks. It also includes Bitcoin exchanges. It will be quite bad if BTC-China is shut down.

[jubalix]

there's too much money to be made the Chinese govt will find a way to make to all work, as key players in it will be recipients.

more interestingly this is a positive sign that the CNY govt feels it is *this* serious

Satoshi calling and I know have your global attention

[tutkarz]

It is looking quite worrisome to me:

At this stage, financial institutions cannot denominate services and products in bitcoin, cannot trade bitcoin, cannot run bitcoin exchange, cannot provide bitcoin related services, cannot store bitcoin for clients, cannot establish bitcoin trust or fund, etc.

this is related to banks not to private businesses like shops or other

[oakpacific]

It is looking quite worrisome to me:

At this stage, financial institutions cannot denominate services and products in bitcoin, cannot trade bitcoin, cannot run bitcoin exchange, cannot provide bitcoin related services, cannot store bitcoin for clients, cannot establish bitcoin trust or fund, etc.

Obviously, what were you expecting a "financial institution" to do?

Financial institution just doesn't include banks. It also includes Bitcoin exchanges. It will be quite bad if BTC-China is shut down.

No, I read the statement, it DOESN'T include exchanges, they said explicitly exchanges must be registered(meaning no shutdown), with "telecom administration authority", which is in charge of the internet regulation, rather than financial regulation.

[bryant.coleman]

No, I read the statement, it DOESN'T include exchanges, they said explicitly exchanges must be registered, with the"Ministry of Industry and Information Technology", which is in charge of the internet regulation, rather than financial regulation.

The statement was in Chinese. If you actually read it and if it is TRUE, then this is VERY GOOD NEWS.

[coins101]

My wife has been translating some of it to me and it doesn't sound very good (although I'd agree what we are seeing is some "panic" selling)..

It seems for individuals to buy or sell Bitcoins is fine but it's beginning to look like businesses will not be able to do business using BTC in China with the biggest concern for Chinese investors probably being whether btcchina could be forced to cease business (nothing was specifically stated about that or any other Chinese exchange though).

Have been keeping a track on transaction volumes and China was doing around 90,000 - 100,000 BTC currency transactions every 24 hours, vs the second biggest market in the USA which was doing around 1/3 the volume.

Today China is down to zero.

I don't think its panic selling. There doesn't seem to be any selling.

[bryant.coleman]

Have been keeping a track on transaction volumes and China was doing around 90,000 - 100,000 BTC currency transactions every 24 hours, vs the second biggest market in the USA which was doing around 1/3 the volume.

Today China is down to zero.

I don't think its panic selling. There doesn't seem to be any selling.

What are you saying? I have just logged in to BTC-China. For the last 60 mins alone, the trade volume stands at 23,264.58 BTC. 

[whatthesith]

No, I read the statement, it DOESN'T include exchanges, they said explicitly exchanges must be registered, with the"Ministry of Industry and Information Technology", which is in charge of the internet regulation, rather than financial regulation.

The statement was in Chinese. If you actually read it and if it is TRUE, then this is VERY GOOD NEWS.

I am a Chinese and I can confirm it is true that it DOESN'T include exchanges.

Actually, BTCChina is already a registered one.

[lindatess]

China’s central bank barred financial institutions from handling Bitcoin transactions. That includes all transactions involving bitcoin. The banks won't process it. The same has happened with CBA, ANZ, WBC in Australia. The same has happened in the United States with many of the larger banks as well.

Apparently it's this line.

二、各金融机构和支付机构不得开展与比特币相关的业务

现阶段，各金融机构和支付机构不得以比特币为产品或服务定价，不得买卖或作为中央对手买卖比特币，不得承保与比特币相关的保险业务或将比特币纳入保险责任范围，不得直接或间接为客户提供其他与比特币相关的服务，包括：为客户提供比特币登记、交易、清算、结算等服务；接受比特币或以比特币作为支付结算工具；开展比特币与人民币及外币的兑换服务；开展比特币的储存、托管、抵押等业务；发行与比特币相关的金融产品；将比特币作为信托、基金等投资的投资标的等。

Why did you deliberately censor it?

It will bring down the exchanges because no one will be allowed to use an exchange. All liquidity will vanish and people will be unable to get rid of their coins easily.

[Tomatocage]

...then they fight you

[eb3full]

Why would anyone in China still want to buy bitcoins when this announcement demonstrates there is little hope for them there?

[franky1]

in other china news. baidu. the chinese search engine accepting bitcoin. has now reported the CEO is now worlds richest man. exceeding google and other company values too.

so if china was to block bitcoin. it will upset their richest citizen, so i do not believe they would want this.

http://www.bloomberg.com/video/meet-china-s-new-richest-man-0SlX524KSa~jqmYkejBlZw.html

if he buys more bitcoins. he will become even more richer in the long term, as will we all.

so dont panic

[lindatess]

in other china news. baidu. the chinese search engine accpeting bitcoin. has now reported the CEO is now worlds richest man. exceeding google and other bompany values too

http://www.bloomberg.com/video/meet-china-s-new-richest-man-0SlX524KSa~jqmYkejBlZw.html

if he buys more bitcoins. he will become even more richer in the long term, as will we all.

so dont panic

Careful, Baidu only accepts bitcoin's for their anti-ddos software... You can't use it to shop on baidu or purchase anything else.

[nioc]

Bitstamp down 12%   BTCChina down 32%

I think the Chinese can read Chinese

[coins101]

China’s central bank barred financial institutions from handling Bitcoin transactions. That includes all transactions involving bitcoin. The banks won't process it. The same has happened with CBA, ANZ, WBC in Australia. The same has happened in the United States with many of the larger banks as well.

I saw this happen to Western Union and many of the money transmitters in the USA many years ago. Many were shutting down because they couldn't get bank accounts. The ones that could did ok.

Western Union's online service is through Western Union International Bank GmbH - its own bank.

Who wan't to set-up a co-op bank to licence exchanges and transmitters?