People's Bank of China Says Bitcoin Cannot Circulate as Currency in the Market

[kekky]

The People's Bank of China has issued today that Bitcoin is a "fictitious currency" and that it cannot be used for circulation as currency in the market in China.

http://squawkonomics.com/2013/12/05/pboc-states-bitcoin-cannot-be-circulated-in-the-market/

The statement regarding banks and financial companies applies to payment companies, or 支付 companies, as well.

http://squawkonomics.com/2013/12/05/pboc-states-bitcoin-cannot-be-circulated-in-the-market/

Sources are from http://money.163.com/13/1205/15/9FBFR87P00254TI5.html and http://www.cnbeta.com/articles/263392.htm see for yourself, and stay tuned, Squawkonomics will be updating you as we get new information in.

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[balanghai]

Yeah because they can't control the price and can't put a 20% bank charge.

[Mulder]

So if payment companies can't accept bitcoin it means that TaoBao can't accept payment in bitcoins

[andreiya]

Today btc down almost 300 usd for that  

[quantumflow]

When China talks crap, the market tanks -  buy buy buy on the dip baby!

[RodeoX]

this is good news for those who feared a China domination of bitcoin. Oh, and I think it is only financial institutions that are barred, not merchants.

[kekky]

Allow me to reiterate:

中国人民银行等五部委发文，要求防范比特币风险。通知明确表示比特币是一种特定的虚拟商品，不具有与货币等同的法律地位，不能且不应作为货币在市场上流通使用。

Translation: The People’s Bank of China has issued a statement requiring guard and wariness regarding Bitcoin’s risk. In a clear notification statement, Bitcoin is a type of particular fictitious and theoretical commodity, not one possessing the status of legal, and moreover cannot act as circulating currency in the market.

This does NOT just apply to financial companies and banks, as is clearly stated from the PBOC development today.

More in the link I posted.

[kaene]

it's a pity that we won't be able to use BTC in taobao ....

[Sindelar1938]

Bitcoin will survive this as it has many setbacks before

Bring it on

[7Priest7]

Today btc down almost 300 usd for that  

Ride the roller coaster that is BTC!

It hit ~1300 bunch of people sold out, it just did it again.
Maybe ~$1300 is just most peoples sell out number.
We will finish with all these day traders, then btc will stabilize.

Also, unlike stocks BTC has a value outside of what you can sell it for.

[Sigmoid]

Also, unlike stocks BTC has a value outside of what you can sell it for.

You mean intrinsic value? You are mistaken. It's stocks that have intrinsic value (at least good stocks). That value comes from owning market share, production capacity, etc. All value of Bitcoin comes from trust.

That said, trust can be a pretty powerful force.

[RodeoX]

Also, unlike stocks BTC has a value outside of what you can sell it for.

You mean intrinsic value? You are mistaken. It's stocks that have intrinsic value (at least good stocks). That value comes from owning market share, production capacity, etc. All value of Bitcoin comes from trust.

That said, trust can be a pretty powerful force.

I know it's debatable, but I think bitcoin does have intrinsic value based on it's utility and privacy. A stock is a promise to pay back with interest on a capitol investment. A promise made by one entity that may fail. Bitcoin has the backing of all it's users and is less likely to fail, because there is no central failure point.

[jongameson]

Where will people buy their drugs now that Silk Road no longer takes them?  ha ha just kidding

wizard currency for wizards on PCP

[Ulysses1994XF04]

I know it's debatable, but I think bitcoin does have intrinsic value based on it's utility and privacy.

What utility? Sure I can buy a few goods and novelties online with it, but I can't pay for food, gas, rent, insurance or any of those sort of things with it unless I convert it back to USD.

And what privacy? From what I've been reading on here, almost every exchange requires you provide photo ID, proof of residence, a bill of some sort or paystub, etc. Aside for the "big/important" things like insurance and rent, I've never had to provide any of those things when buying things online. What privacy?

[Jcw188]

They haven't outlawed it yet though they just say it's not a "currency".  So it can still be used between 2 ppl, just not with banks I think.

[kekky]

Just got a look at the PBOC official statement in Chinese at http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2013/20131205153156832222251/20131205153156832222251_.html and got it translated. Here's the highlights of what it says:

On the PBOC’s website in Chinese, the PBOC, China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), and China Insurance Regulatory Commission (CIRC) have together issued in a joint statement the following highlights of what it forbids:

1. Requiring at the present stage, every financial institution and payment institution cannot set prices in Bitcoin, nor execute transactions.

2. Bitcoin cannot be used as a payment tool to settle accounts.

3. Cannot use Bitcoin for foreign [and domestic] currency exchange.

4. Bitcoin cannot be used in trust funds, other investment funds.

5. Cannot issue financial products and services in Bitcoin.

More highlights of the development here at http://squawkonomics.com/2013/12/05/bitcoin-gets-qq-coined-in-china-pboc-and-regulatory-commissions-statement-highlights/

[Mad Scientist]

1. Requiring at the present stage, every financial institution and payment institution cannot set prices in Bitcoin, nor execute transactions.

But everyone else can right?

[KryptoKit]

Every interesting - I've been following the crash.

[Sigmoid]

I know it's debatable, but I think bitcoin does have intrinsic value based on it's utility and privacy.

It doesn't create income, so it doesn't have intrinsic value. It can be a good store of arbitrary market value though, due to its utility.

A stock is a promise to pay back with interest on a capitol investment.

Erm... no. That is a bond.
A stock is a fractional ownership in an enterprise, which is, if you chose the stock well, a productive entity in the real economy with employees, market and assets.

A promise made by one entity that may fail. Bitcoin has the backing of all it's users and is less likely to fail, because there is no central failure point.

In theory... But have you seen stampeding cattle? And stampeding humans?

[RodeoX]

I know it's debatable, but I think bitcoin does have intrinsic value based on it's utility and privacy.

What utility? Sure I can buy a few goods and novelties online with it, but I can't pay for food, gas, rent, insurance or any of those sort of things with it unless I convert it back to USD.

And what privacy? From what I've been reading on here, almost every exchange requires you provide photo ID, proof of residence, a bill of some sort or paystub, etc. Aside for the "big/important" things like insurance and rent, I've never had to provide any of those things when buying things online. What privacy?

You are right about both these things. Most can't pay YET. Although I buy lots of things all the time and it's growing exponentially, and the real estate I'm buying with my imaginary money will be rented for bitcoin. Bitcoin is far, far more private than PayPay, credit cards, or whatever else your using on the internet. Those methods expose your financial information to strangers. Bitcoin is simply better money than the USD.  

A stock is a promise to pay back with interest on a capitol investment.

Erm... no. That is a bond.
A stock is a fractional ownership in an enterprise, which is, if you chose the stock well, a productive entity in the real economy with employees, market and assets.

Ok, a stock is more of a hope for future profit then.