Feeds

People's Bank of China bans Bitcoin over 'drugs and guns' trade fears

It's a virtual good, not a proper currency that we can control, sniff Chinese moneymen

Remote control for virtualized desktops

China has banned its banks from using Bitcoin after warning the cryptocurrency could be used to fund terrorism.

Financial institutions in the Middle Kingdom will no longer be able to use Bitcoin, although citizens are free to spend the digital funny money.

The People's Bank of China announced its decision in a statement countersigned by four other financial bodies. It said that Bitcoin was a "virtual good" rather than a currency.

“Although there are people calling it a ‘currency’, it is not issued by the monetary authority, it does not possess the attributes of a currency such as legal repayment and enforcement abilities,” the central bank said in its (Chinese-language) missive.

“Judged by its nature, Bitcoin is one particular kind of a virtual product. It does not have the legal status of a currency, and it cannot and moreover should not be allowed to circulate in the market as a currency.”

The price of one Bitcoin recently surged to more than $1,000, although it slumped to about $970 after the Chinese central bank announced its decision.

Chinese speculators have been driving up the price of the virtual money, but they may be forced to think again if the official attitude hardens any further.

The People's Bank went on to claim that Bitcoin was used by a number of dodgy characters already.

The bank added: "As Bitcoin transactions can be done anonymously and are not restricted by location, it's difficult to monitor capital flows and it therefore facilitates money laundering and financing for terrorist activities. There have been criminal activities using Bitcoins, such as trading of drugs and guns. Relevant cases are under investigation."

The statement also warned (well, the Google Translate version said) that Bitcoin was "not having sex with mandatory legal tender currency", although something may have been lost in translation there. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
UK.gov pushes for SWIFT ACTION against nuisance calls, threatens £500k fines
DCMS seeks lowering of legal threshold to fight rogue firms
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
ISPs handbagged: BLOCK knock-off sites, rules beak
Historic trademark victory, but sunset clause applies to future blocks
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
How to simplify SSL certificate management
Simple steps to take control of SSL certificates across the enterprise, and recommendations centralizing certificate management throughout their lifecycle.