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Chinese government says Bitcoin cannot be used as currency

techinasia.com

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Re: Chinese government says Bitcoin cannot be used as currency

#21

Post by gohrt »

lingben wrote: post #5

This was very much expected as China has strict financial liquidity controls and bitcoin was being used expressly to bypass the same and take money out of the system. The Chinese government isn't stupid.

"Liquidity controls" meaning what? Preventing Chinese from buying non-Chinese products+services with yuan? Or from moving USD out of China?

If yuan are hard to spend, due to legal constraints, I don't imagine a non-Chines is willing to sell BTC for yuan.

How would a Chinese use BTC in this way? Buy BTC from someone willing to accept yuan; spend the BTC on .... foreign goods mailed to China? Foreign assets, to "park" the value for a while ?

Re: Chinese government says Bitcoin cannot be used as currency

#22

Post by trevelyan »

lingben wrote: post #5

This was very much expected as China has strict financial liquidity controls and bitcoin was being used expressly to bypass the same and take money out of the system. The Chinese government isn't stupid.

I think you need to read between the lines.

The fact that five Ministries and departments inserted themselves into this declaration suggests that the Bank of China is not strong enough to unilaterally ban bitcoin beyond what we have seen here: fairly sensible restrictions on BTC investment and holding by financial institutions.

What we are witnessing may even be a regulatory coup of sorts by MIIT, the Ministry with the most obvious interest in promoting bitcoin and the strongest claim to serve as regulator of it and other "virtual commodities".

Re: Chinese government says Bitcoin cannot be used as currency

#24

Post by gohrt »

This seems to be a way of saying that, unlike USD which has a controlled exchange rate on the public/legal markets, you can't just pay your bills in BTC because the person you are paying has no way to determine what the BTC are worth, so you have to covert them to official currency.

What other decision is possible? To have an official govertment exchange rate posted for banks to use? That would be insane, with BTC's volatility.

Re: Chinese government says Bitcoin cannot be used as currency

#25

Post by gohrt »

charlesism wrote: post #12
cheesylard wrote: post #11

Earlier quoted context omitted.

It is impossible to definitively give a reason as to why something as uncontrollable as Bitcoin changes in price. But yeah, probably.

Well, if ever it were possible to definitively give reasons, this would be the time. When you have, on the same day: a) Greenspan's announcement saying bitcoin is a bubble, and using the "no intrinsic value" argument b) China effectively banning bitcoin (not that we have the specifics to say that "ban" is the best term yet) ...it's not going to do wonders for the price.

Both (a) and (b) have been stated forever. (b) was just common knowledge, clarified with an official announcement today.

Re: Chinese government says Bitcoin cannot be used as currency

#26

Post by gohrt »

coldtea wrote: post #19
TomGullen wrote: post #15

Earlier quoted context omitted.

Schadenfreude?

No, they feeling of being verified for what is a very obvious belief, compared to people going for the gold rush like fools...

For ever fool who loses money in the gold rush, there is a genius who made money.

Re: Chinese government says Bitcoin cannot be used as currency

#27

Post by cheesylard »

gohrt wrote: post #25
charlesism wrote: post #12

Earlier quoted context omitted.

Well, if ever it were possible to definitively give reasons, this would be the time. When you have, on the same day: a) Greenspan's announcement saying bitcoin is a bubble, and using the "no intrinsic value" argument b) China effectively banning bitcoin (not that we have the specifics to say that "ban" is the best term yet) ...it's not going to do wonders for the price.

Both (a) and (b) have been stated forever. (b) was just common knowledge, clarified with an official announcement today.

Yeah, but Bitcoin's price is not based purely on logic. It is also based on emotion.

Re: Chinese government says Bitcoin cannot be used as currency

#28

Post by kaonashi »

knowitall wrote: post #2

What exactly does that mean? Is it illegal to, say, pay for a house in eggs (I give you 1 million eggs for this house)? Any kind of barter is illegal?

Currency and barter transactions are very different things. Currency transactions are based on credit, barter transactions are based on trading commodities without any intermediary.

Re: Chinese government says Bitcoin cannot be used as currency

#29

Post by kaonashi »

gohrt wrote: post #26
coldtea wrote: post #19

Earlier quoted context omitted.

No, they feeling of being verified for what is a very obvious belief, compared to people going for the gold rush like fools...

For ever fool who loses money in the gold rush, there is a genius who made money.

By betting against the fools.

Re: Chinese government says Bitcoin cannot be used as currency

#30

Post by knowitall »

gutnor wrote: post #9
knowitall wrote: post #2

What exactly does that mean? Is it illegal to, say, pay for a house in eggs (I give you 1 million eggs for this house)? Any kind of barter is illegal?

In addition of other comments about Chinese economic control. There is plenty of regulation for bartering in most countries. Like for a house, you local IRS will have something to say if you exchange your house and dodge taxes like that. Taxes is the key issue in our economies.

Sure dodging taxes is of course illegal. But you don't have to dodge taxes just because you barter.
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