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Author Topic: Bitcoin in China - legal status  (Read 699 times)
imfed
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December 09, 2013, 10:18:59 PM
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First the good news. The People's Bank of China's recent statement made clear that

a) trading (possessing, buying, selling) Bitcoin is legal

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the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.

b) that Bitcoin exchanges should follow telecommunicatons and internet regulations and AML/KYC rules (regulation implies that it is legal)

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Bitcoin websites that act as the main trading platform, should follow the Telecommunications Act and the Regulation on Internet Information Service, and register according to law. Also, because Bitcoin has a higher risk of money laundering and being used by criminals, the Notice requires the relevant organizations to follow the requirements of the Anti-Money Laundering Act and fully comply with the legally required anti-money laundering procedures like KYC and suspicious transaction reporting, to prevent Bitocin related money laundering risks.

This is a completly different approach to US regulators. While FinCEN defines Bitcoin as virtual currency the People's Bank of China defines Bitcoin as virtual commodity that "does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market."

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Although it is called currency, it is not issued by a monetary authority, it does not have the status of legal tender and obliged payment status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market.


Contrary to FinCEN, that strictly limits the general public's use of Bitcoin to the purchase of goods or services, China may limit the use of Bitcoin as medium of exchange. Bitcoin can still be used as a commodity like gold.
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December 11, 2013, 08:50:38 PM
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What a refreshing read that was.  Can't wait for this to become widespread all over.  It is time to shake things up a bit and try something outside the box.

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