Financial institutions deal with currency, and the Chinese government wants to keep it that way.
Bitcoin Exchanges and related companies deal with Bitcoin, and the Chinese government wants to
proceed this way.
It's only clarification of separation between
THESE businesses, not Bitcoin in general.
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.
Bingo!
Good to see you all are starting to understand finally.
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.
Yes and they will collect capital gains and/or VAT taxes on Bitcoin appreciation as an investment even if you are trying to use it as a currency (medium-of-exchange), thus
it can not be a currency.
But developers of altcoins will rise to the opportunity and create truly anonymous coins. Anoncoin isn't it. Bitcoin isn't it. I will soon publish a whitepaper to explain why.
In short, you need to understand that Chaum mix-nets (e.g. Tor) are vulnerable to timing attacks, and even honeypotting given only 3 hops. They NSA and spy agencies in each country are likely still able to track your identity much of the time. And VPNs are likely all controlled/backdoored/hacked/rooted by the NSA. And exchanging through mixers and altcoins does not obscure your IP address
no matter how many times you do it. Also even across these proxies, your identity is tracked in other ways such as browser plugins trojans, cookies, patterns of internet uses such as favored search terms,
facbook et al tracking the way you type, etc..
Even if you are one of the lucky few who manages to keep your anonymity assured by careful mix of the above methods, the point is the majority will not. And thus it is very simple for the government to
make your anonymous coins practically unspendable and useless. The government simply sends a tax bill and put criminal liability for all activity on a coin since mining until present, until those non-anonymous coins holders (or former holders) can provide the identity of whom they bought from and sold to.
Thus all
users will become afraid and only accept coins and sell coins from those who provide their complete identity. Thus only a coin with widespread
assured anonymity would be able to become a currency and remain immune to government control.
So clearly you can see that you
never will have anonymity with Bitcoin nor any current altcoins.
Thus Bitcoin and the current altcoins can never be currencies (unless the governments take them over somehow and make them legal tender), and the government will essentially control them.
Note one means anonymity
I proposed thus far are a new way to do physical crypto-coins.
