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China Bans Financial Companies From Bitcoin Transactions

bloomberg.com

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Re: China Bans Financial Companies From Bitcoin Transactions

#61

Post by olalonde »

According to someone on Bitcointalk.org, it might not be as bad as it seems (https://bitcointalk.org/index.php?topic=358341.msg3832549#ms...):

No. You Western guys completely misunderstood the news. To me, this is actually BULLISH!

TL;DR, the document says:

1. Bitcoin is a virtual commodity, not a real currency

2. People have the freedom to trade bitcoin, but they need to take their own risk

3. 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.

4. Bitcoin exchanges must be registered, and follow AML and KYC rules

This means major Chinese bitcoin exchanges like BTCChina will stay. You just won't see any Chinese bitcoin ETF anytime soon.

Re: China Bans Financial Companies From Bitcoin Transactions

#62

Post by scotty79 »

wavesounds wrote: post #28
ars wrote: post #19

Pretty disappointed in this statement from Greenspan: “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.” All money has no intrinsic value, including gold. Things have value because other people want them. That's it. People want bitcoin, then it has value. Pretty much the only thing with i…

Dollars have intrinsic value in that you can burn them to keep warm, gold you can make things out of, Bitcoins have no possible use outside of being a currency, thus no intrinsic value.

Bitcoin has intrinsic value because you can use zeros and ones as a desktop wallpaper. You can also leave messages for posterity in the blockchain.

Re: China Bans Financial Companies From Bitcoin Transactions

#63

Post by ashray »

eof wrote: post #16

My read of this is that businesses are not allowed to price their goods in bitcoin which is a huge hit; beyond this nothing seems terribly surprising. > "Notice" requirement, at this stage, financial institutions and payment institutions are not allowed to Bitcoin price for the product or service, edit: from: http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2013/201312...

I'm confused about what constitutes a payment institution. Does this mean that credit card processors cannot price in bitcoin ? Or does this mean that Starbucks cannot price in bitcoin ?

There seems to be a distinction between a business and a payment institution. Or maybe what's said here is that a bitcoin transaction is like a 'coupon code' and not governed under the same rules that paying with money would be.

Re: China Bans Financial Companies From Bitcoin Transactions

#64

Post by girvo »

salient wrote: post #54
rms wrote: post #44

From the Google translation of the original source: "However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk." The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good…

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign? Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not ki…

Restrictions like these were always going to happen. Whether they take them further like you've said is the big question. For now, it's going to continue to grow, short term at least.

Re: China Bans Financial Companies From Bitcoin Transactions

#65

Post by [deleted] »

ashray wrote: post #57
salient wrote: post #54

Earlier quoted context omitted.

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign? Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not ki…

The restrictions appear to be placed on banks and other financial institutions creating any bitcoin related instruments (ETFs, etc.) or dealing directly with bitcoin (eg. exchange RMB for BTC or the reverse). Also, it would essentially prevent a bank using it's reserve for a bitcoin investment. Exchanges can still operate as exchanges and can continue to have bank accounts as long as said banks do not deal themselves…

[deleted]

Re: China Bans Financial Companies From Bitcoin Transactions

#66

Post by scotty79 »

bdcravens wrote: post #34
Svip wrote: post #8

Earlier quoted context omitted.

> Where? It's still trading over $1000 on every exchange I follow. This announcement seems to have almost no perceptible effect on the price of Bitcoin. Well, the prices did drop about $200 on MtGox after the news. It's debatable whether this qualifies as 'plunged'.

It was over $1200. 17% drop in an hour or 2? That's a plunge.

Is it still a plunge if it's going to be followed by soar?

Re: China Bans Financial Companies From Bitcoin Transactions

#67

Post by rms »

alphonse23 wrote: post #60
salient wrote: post #54

Earlier quoted context omitted.

I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign? Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not ki…

I think it's a bad sign for the Chinese, not the bitcoin. If the central bank doesn't regulate it's trade, they're slowing down the time it takes for Chinese to trade compared to other countries. It just means only private wealthy companies can facilitate the trades -- which is dangerous in itself. By opting out of controlling bitcoin transactions, I think the Republic of China is in some ways harming its only citize…

The CCP pervasively makes decisions that can harm its people. I didn't realize people were seriously considering the idea that the PRC was going to offer a national trade in bitcoin.

Re: China Bans Financial Companies From Bitcoin Transactions

#69

Post by alphonse23 »

obiefernandez wrote: post #50
wavesounds wrote: post #48

Earlier quoted context omitted.

Also a lot of people who think its too high and were waiting for a sign it was time to take their profits and get out.

Well, either way, the next few hours should be interesting as the east coast wakes up and sees the headlines. Will they panic sell and push the price down further? Or will they notice that selloff at BTC-China exchange is over and see it as buying signal?

I tried logged into coinbase to sell my bitcoins after hearing the news and seeing the price dropping on btcchina. While I was doing this, coinbase's security sms messager took forever to come in, and because I sent in a request too many times coinbase blocked me out and said to try logging in again in 24 hours...

oh well, the price for the most part is recovered after the bump (here and in China) -- so I'm luck in some sense, BUT ... It's nice to know that if I ever needed to sell my btc in a jiffy coinbase will try to screw me...

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