question about china / i feel, strange rulings

[Ford]

Given that it is within the power of the Chinese Gov, to ban or at least ban all Chinese companies from dealing in Bitcoin, why have they not simply banned it?

it seems strange to me as to why they would put the "hurdles" in the way of bitcoin development within China, that are now seeming more anti bitcoin, yet they have not made any mention about banning its use outright (rather the opposite).
I dont think that it is a case that they "dare not ban" bitcoin, in a similar way to how a western gov may react, as china are very use to banning things that do not "meet in with their plans for the country".

Just wondering what other people think, as i find these actions "strange"....

Thanks
Ford

[MineForeman.com]

Just speculation on my part, but I think that one of the banks was about to start trading in bitcoin and ran it by the party (they do that over there) and the party had a good look at it and had more questions that needed answering.

Until they worked out the 'in's and out's' of bitcoin banking they put a ban on banks using bitcoin.

Like I said though, that is me speculating.

Neil

[t1000]

I think it is very strange too.

First of all why would China let bitcoin get so far before waving the ban hammer around. It's not like any of the bitcoin companies are independent of government elements anyway.

Secondly, why do it in two goes. First they banned banks and financial institutes from dealing in bitcoins, then they banned 3rd party payment processors from dealing with exchanges, two weeks after the first ban.

Thirdly, it's sounds to me like these decisions are all made by the PBOC, haphazardly, It just feels to me like the central bank and the state are not taking the same stance on bitcoin.  It feels like the bankers are trying to protect their interests while the people want bitcoin.

[Ford]

I think it is very strange too.

First of all why would China let bitcoin get so far before waving the ban hammer around. It's not like any of the bitcoin companies are independent of government elements anyway.

Secondly, why do it in two goes. First they banned banks and financial institutes from dealing in bitcoins, then they banned 3rd party payment processors from dealing with exchanges, two weeks after the first ban.

Thirdly, it's sounds to me like these decisions are all made by the PBOC, haphazardly, It just feels to me like the central bank and the state are not taking the same stance on bitcoin.  It feels like the bankers are trying to protect their interests while the people want bitcoin.

My points exactly + from other earlier "actions" china have been actively encouraging bitcoin use, although i dont see how bitcoin will harm the investments of PBOC (i know may people think it will harm banks, but i am yet to see any good arguments as to why and how (it will have an effect, but not a devastating one). i feel banks can still have their place in a more bitcoin friendly economy )

I am wondering if PBOC want to slow the increase in value of bitcoin, to a more stable and steady increase...... why they would want to do this though, is for speculation

[FandangledGizmo]

Yes it's very unusual for China, they usually make very logical, considered and tactical decisions.

But to seemingly both, close the door on Crypto-Currencies & do it in such a haphazard way, you have to question if they are ready for the future.
I guess we will have to see how this plays out.

This Chinese proverb I found on Wikiquote seems apt.

风向转变时,有人筑墙,有人造风车

When the wind of change blows, some build walls, while others build windmills.

[t1000]

This Chinese proverb I found on Wikiquote seems apt.

风向转变时,有人筑墙,有人造风车

When the wind of change blows, some build walls, while others build windmills.

Nice. 

[pening]

Yes it's very unusual for China, they usually make very logical, considered and tactical decisions.

I see the current situation is tactical.  By restricting payment processing you restrict everyday man-in-the-street use, without harming those who want to use it as a value store or involved in international trade (in particular chip fabs).  They don't need to ban it if its no threat, if mainstream access is limited its not much of a threat. 

[EvilPanda]

So what may the government be concerned about (random order):
1) Foreign money transfers and money laundering
2) Tax avoidance
3) Pressure from the banks losing profits
4) Losing control over the people who gain more financial independence.
5) Black market trade

Some of these problems (like nr 2) may be easy to deal with, some are IMO impossible (nr 3, 4). Banks are the losing side here, some of them will adapt and others will fight.

[taltamir]

So what may the government be concerned about (random order):
1) Foreign money transfers and money laundering
2) Tax avoidance
3) Pressure from the banks losing profits
4) Losing control over the people who gain more financial independence.
5) Black market trade

Some of these problems (like nr 2) may be easy to deal with, some are IMO impossible (nr 3, 4). Banks are the losing side here, some of them will adapt and others will fight.

what governments are REALLY afraid of is the inability to print money. This would massive reduce their effective tax revenue since inflation is a nothing but a stealth tax

[laowai80]

I see the current situation is tactical.  By restricting payment processing you restrict everyday man-in-the-street use, without harming those who want to use it as a value store or involved in international trade (in particular chip fabs).  They don't need to ban it if its no threat, if mainstream access is limited its not much of a threat. 

Good point.

[qualia8]

So what may the government be concerned about (random order):
1) Foreign money transfers and money laundering
2) Tax avoidance
3) Pressure from the banks losing profits
4) Losing control over the people who gain more financial independence.
5) Black market trade

Some of these problems (like nr 2) may be easy to deal with, some are IMO impossible (nr 3, 4). Banks are the losing side here, some of them will adapt and others will fight.

what governments are REALLY afraid of is the inability to print money. This would massive reduce their effective tax revenue since inflation is a nothing but a stealth tax

All of these are true, but easily foreseeable.  The question is why were those state television / newspaper articles run in the first place?

[kwoody]

chip fabs likely have something to do with it.
could also be testing the resilience of bitcoin itself.
chances are the bankers are just afraid.
any number of plausible scenarios, really.

[taltamir]

I see the current situation is tactical.  By restricting payment processing you restrict everyday man-in-the-street use, without harming those who want to use it as a value store or involved in international trade (in particular chip fabs).  They don't need to ban it if its no threat, if mainstream access is limited its not much of a threat. 

This makes perfect sense, its not even just the chip fabs, any positive you can come up with can be enjoyed by the government and cronies, while every "negative" (for the government) scenario is stopped by denying it to the serfs

[Siegfried]

Maybe the government itself wants some time to stealthily acquire a hoard of bitcoin. In the meantime, they will observe how it plays out in the rest of the world and then relax restrictions once they better understand how it will effect they economy.

[tacoman71]

Have you read my post about the supposed "ban"? https://bitcointalk.org/index.php?topic=375228.0sp

[jixin55]

i am in china.

basically they dont allow banks and processors to send money TO exchanges, however the reverse is allowed.

so nobody can buy BTC with chinese RMB, creating a sell BTC only situation.

[mvalley]

Can people purchase BTC using USD within China using any exchange? A lot of folks have USD over there and/or can buy USD on the black market.

[viajero]

Maybe the government itself wants some time to stealthily acquire a hoard of bitcoin. In the meantime, they will observe how it plays out in the rest of the world and then relax restrictions once they better understand how it will effect they economy.

this is exactly what i thought. they are afraid of the destructive threat, but they also see the advantages. so they just cripple it for the moment, taking away the threat and just wait and see how it will end up in the rest of the world. if they want, they can easily loosen the restrictions if needed. that would be very complicated after a official ban. further more they have probably already realized, that there is no way to enforce a total ban bcs bitcoiners would just go off the grid and therefore out of governmental controll.

so actually this chinese move is kind of smart (as often) though probably kills any chinese bitcoin inovation for the moment. let the others take the risk and adapt later if necessary.

i for my part would be much more happy with a full ban! would take a lot of uncertainty off the BTC prize and it would be even more interessting to see how the chinese bitcoin comunity would adapt.

[viajero]

Maybe the government itself wants some time to stealthily acquire a hoard of bitcoin. In the meantime, they will observe how it plays out in the rest of the world and then relax restrictions once they better understand how it will effect they economy.

this is exactly what i thought. they are afraid of the destructive threat, but they also see the advantages. so they just cripple it for the moment, taking away the threat and just wait and see how it will end up in the rest of the world. if they want, they can easily loosen the restrictions if needed. that would be very complicated after a official ban. further more they have probably already realized, that there is no way to enforce a total ban bcs bitcoiners would just go off the grid and therefore out of governmental controll.

so actually this chinese move is kind of smart (as often) though probably kills any chinese bitcoin inovation for the moment. let the others take the risk and adapt later if necessary.

i for my part would be much more happy with a full ban! would take a lot of uncertainty off the BTC prize and it would be even more interessting to see if and how bitcoin could survive a full blown ban.

[hilariousandco]

Given that it is within the power of the Chinese Gov, to ban or at least ban all Chinese companies from dealing in Bitcoin, why have they not simply banned it?

How could they ban it and under what grounds? Even if they did 'ban' it, it's not going to stop people from using it.