Topic: "China does NOT allow goods/services to be sold/paid for by bitcoin" CEO of btcc (Read 4271 times)

Agreed. A big part of the motivation is probably to stem potential capital flight out of China via bitcoin. Not there was likely much of that going on, but the gov probably wants to get out ahead of matters. Which means eliminating layers of financial intermediaries that could obscure identity (hence why "payment processors" might not be allowed to interact with bitcoin exchanges, but banks are ok).

All in all, it will probably indeed dampen the mania to some degree, but it's by no means as hostile as many are making it out to be.

For the record, we can fully expect governments everywhere to demand the equivalent of AML/KYC, which is more or less what this China action likely amounts to (though more rigidly). That AML/KYC status-quo permeates the global financial system; not just the US.

All of the analysis thus far and including my prior post, is myopic and ignores the ecosystem networking effects.

The Chinese will own 10s or 100s of $billions perhaps even $trillions of value stored in BTC. Do you really think the market is not going to respond and try to market something to that huge capital base?

For example, the Chinese could go on vacation abroad and spend their BTC.

Or they could buy and sell abroad over the internet, e.g. such as for their homes abroad or running business virtually abroad. Especially they become wealthy investing in BTC.

Also the anonymous altcoin comes along, they leverage their BTC into that.

China is desperate to grow the consumer share of their economy because as http://pettis.com has pointed out, their economy will collapse if they don't. Do you really think they will allow all that consumer business to go abroad? No. The wall is coming down. China is transforming.

Etc.....

China can't put the free market use of Bitcoin back in the bag.

3. People's Bank of China banned all the third party payment company doing business related to bitcoin, including bitcoin exchange platforms.
For those who is currently doing, they are required to completely cut off bitcoin related business by the Chinese new year, which is at the end of Jan 2014.

After Dec 5, small merchants or online shop owner could still accept bitcoin as payment and comfortably convert them to rmb through exchange like btcchina. In the future , this is going to be much harder and completely illegal after the Chinese new year. Basically, bitcoin is dead in China for the most part. People can only use it as speculative investment and store of value, but it is going to very hard for them to realize their potential profit legally in the future.

My personal opinion is that China is in not going to have a robust bitcoin economy anywhere in the medium or long term future.

China currently has a $50k USD restrictions on the amount of money its citizens can take out of the country. Bitcoin with its anonymous nature can easily by pass these restrictions. yeah i know there's AML/ KYC rules set up for BTCchina now but i know that if btc becomes a widely circulated "commodity" in exchange for services and goods that it will be easier to launder and hide illicit gains in bitcoin than it would be to hide them yuan. http://www.china-briefing.com/news/2011/11/11/getting-cash-money-rmb-out-of-china.html
if citizens in China start using btc as a "commodity" in exchange for services and goods that would threaten the stability of the chinese yuan. it certainly would not raise the value of the yuan. i don't see how the chinese govt would encourage this to happen.

the Chinese banks are banned from offering services/goods in bitcoin. that was NOT a good sign. it certainly wont make it easier to start bitcoin related businesses in china. Baidu/China Telecom's immediate removal of btc as a payment option following the offical govt announcement was NOT a good sign. i don't know how anybody can spin those actions as a positive for bitcoin.
i also don't believe that bitcoin is booming in China because it's citizens believe in it as an alternative currency. I believe the price skyrocketed due to greed and pure speculation. take a look at the 2010 China Garlic Bubble where in a few months the price of garlic rose 40-50x due to pure speculation, price manipulation and hoarding. Sound familiar to bitcoin in China? http://www.npr.org/templates/story/story.php?storyId=121125739

Plenty of redditors have claimed that China would be supportive of btc because it would devalue the US dollar and raise it's own yuan in value for foreign trade. that's highly unlikely since the Yuan is already the #2 most used currency for foreign trade in the world. China is about to start direct trade with the UK in yuan/pounds. the daily global trade in Chinese Yuan is over $120 billion which is 10x the market cap of bitcoin.
http://www.bloomberg.com/news/2013-12-03/yuan-passes-euro-to-be-second-most-used-trade-finance-currency.html
China is a quasi-totalitarian regime that has no qualms about crushing any form of rebellion (labour camps for journalists, tiananmen square, human rights violations, highest # of executions in the world). Bitcoin by its very nature is designed to give the power back to its people, its users. China's entire recent history is about controlling it's people.

tldr: bitcoin gives freedom and power to the Chinese citizens, the chinese government is realizes this and will move to prevent China from ever having a robust btc economy where btc will be widely traded for services/goods. Chinese citizens have a history of participating in mass speculative bubbles without caring about the fundamental value.

I guess Chinese sellers can still use payment gateways that instantly convert bitcoins into RMB and then settle it to merchant's account. Of course prices will be in national currency.

Given that Chinese individuals are free to buy bitcoins and hold them as investment, they are also free to buy any goods for BTC through described above payment platforms.

I guess Chinese sellers can still use payment gateways that instantly convert bitcoins into RMB and then settle it to merchant's account. Of course prices will be in national currency.

Given that Chinese individuals are free to buy bitcoins and hold them as investment, they are also free to buy any goods for BTC through described above payment platforms.