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Author Topic: Report from central bank of China :bitcoin may bring to us three risks  (Read 901 times)
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May 06, 2014, 06:35:03 AM
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People’s Bank of China has released a Chinese financial report in 2013,pointing that bitcoin is not currency in real sense .Bitcoin is a speculation tool rather than payment tool on physical economy .So bitcoin owners are willing to collect bitcoin rather than buy other goods .The public lacks enough understanding in bitcoin .Meanwhile ,some people buy bitcoin for speculation or hype ,which may lead to risks .
According to the report ,bitcoin develops rapidly since 2009.At the beginning of 2013,bitcoin price was only 13 dollars ,while on April it was over 100 dollars ,and its highest price was more than 1000 dollars on December .
Bitcoin quickly development raises the thought to virtual currency .Some body say that bitcoin appearance is an enormous challenge to currency system ,even say it will be future gold .
From the attribute ,bitcoin is not currency in real sense .
First ,without the support from national trust and law ,bitcoin circulating range is limit and unstable even difficult to be a payment tool .
Second ,bitcoin scale is limit ,so it is difficult to satisfy the demand on economic development .If bitcoin becomes ccurrency ,it may lead to deflation and suppress economic development .
Third ,bitcoin lacks adjusting system from central banks .So it is easy to be speculated causing a changeable price .
Forth ,bitcoin is difficult to be general equivalence with strong replacement .So any digital currency is likely to replace bitcoin .
At present ,bitcoin is a speculation tool more than a payment tool on physical economy .Its owners are willing to collect it rather than buy other goods
In the report ,central bank of China pointed out bitcoin risks .
First ,bitcoin trading platforms ,process and rules lack supervision and law security .Thus ,it is easy to produce the illegal behaviors such as price operation and false trade .The funds on the accounts ,reckoning and outturn also exist risks .
Second ,bitcoin price lacks reasonable support .its price only depends on the confidence and expectation from the participants even mainly depends on the imagination that bitcoin will be world currency ahead .So it is easy to be a speculation tool .
Third ,with the peculiarity covert ,anonymity and free ,bitcoin funds flow direction is difficult to supervise ,which provides convenience for illegal activities .
On December ,2013,People’s Bank of China has released the notice about preventing bitcoin risk ,demanding financial and payment organizations not to provide any service for bitcoin .The websites providing bitcoin registration and trade should fulfil anti-money laundering obligation identify clients identity .Financial and payment organizations should strengthen currency knowledge education to the public ,guiding them to build up correct currency and investing viewpoint .

Remaks: Due to language difference, sometimes people out of China can’t know what happened in China quickly. so we are here to make effort to change little, we will translate 3-4 bitcoin news in China to English everyday to help people out of China know what happened and what people thinks about bitcoin in China, If somewhere translate not that good, pls PM us so that we can  correct it.    

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May 07, 2014, 02:59:41 AM
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I'm pretty certain that these "risks" can be nullified as long as the cryptocurrency community is supportive and growing. Then again, I have noticed China's attitude towards cryptocurrencies quite unfavorable.
Interesting post btw, we can evidently see more of what is coming next.
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