Topic: People's Bank of China Says Bitcoin Cannot Circulate as Currency in the Market (Read 2207 times)

he is right, China, or any other government, would be insane to acknowledge bitcoin as a proper currency. Cryptocurrencies arent mature yet.

Thank you very much for this. Really appreciate it.

Wow, the bitcoin price was shown everyday in on a financial tv show on the state TV over the summer?!  
It seems even the boss there considers Bitcoin as a commodity (like gold) and a choice of investment (rather than scam).  

Hi kekky,

You can apparently buy all sorts of illegal things on Taobao - I guess that is simply because of the power of the owners.

That doesn't make any comparison between QQ coins and Bitcoins (due to Taobao) either correct or sensible - the fact that you can buy illegal things on Taobao does not put QQ coins and BTC on a par - it just shows how things work in China.

Hi Ciyam,

That article was originally posted in 2007, and updated in 2012. Since 2007 until now, QQ Coins have been able to exchange for RMB on Taobao, and people have been able to exchange RMB at smaller exchanges as well for many years.

QQ Coins and Bitcoin similarly can be exchanged for RMB, of course. The December 5 PBOC statement clearly stated that people are free to trade in Bitcoin, provided they assume the risk.

The key point here is that the December 5 PBOC statement stated that Bitcoin cannot be used to buy or sell domestic physical goods and services in China. It cannot circulate as currency in the market for any real goods and services. Virtual goods and services with QQ Coin and Bitcoin are generally not affected by the PBOC statement. So that much is clear.

Now, the PBOC statement leaves room open to enforce new regulations with this line here:

3 . 不能用比特币与人民币及外币的兑换服务

Translation: Cannot use Bitcoin for foreign [and domestic] currency exchange service.

The PBOC could possibly use this to enforce currency exchange restrictions, but currently we see exchanges operating as normal. So currently that does not appear to be affected.

It is interesting to note that on China state TV, Bitcoin is largely presented as an asset class in charts, rather than that of a currency, and has been doing so over the summer. It's price was listed on financial TV shows next to the Shanghai Composite, to show comparisons between asset classes for investors. So it is not surprising that the PBOC classified Bitcoin as an investment in which the bearer holds all risk, rather than elevating it to currency status.

Hope this helps, and thank you for your interest!

-Kekky

In the article you linked to I see this:


So although it might be happening it is not according to the rules (and likely will be stomped on) - again this is not the same situation as BTC.

Cannot they use BTC-e? It requires no identification, and is about to become the world's second largest exchange by volume (look at the daily charts here). Of course, they would need to obtain dollars or euros first, but that is not very difficult.

Hi Ciyam,

You CAN exchange your QQ Coins for real money.

http://www.scmp.com/article/590157/taobao-carries-qq-coins

Key quote here: "Online auction sites such as Taobao are "part of the problem" [Kekky note: not my opinion!!] as they allow users quick and easy exchange of QQ coins back to real money.

The problem is that similarly to QQ Coins not being able to buy real goods and services within the domestic Chinese economy, Bitcoins are now not able to buy real goods and services within the domestic Chinese economy.

This is not correct - you *can* sell your BTC for RMB on btcchina and other exchanges (they do now insist on ID which is no different to other major exchanges).

You *cannot* sell QQ coins for RMB (via any equivalent to an exchange) so that is a *huge* difference.

The latest statements basically restrict BTC to being more like a "stock" (which you can speculate on) than to being the equivalent of QQ coins (which function more like "reward points" that you can exchange for "virtual goods").

I have tried to find a list of largest companies in which more than half are Chinese, without any success. Could you provide a reference?

Guys, we R in a lot of trouble here. I have been predicting this the whole time. Check out this pic I found from deep underground china. Look at what they R doing over there. Mining. Mining away at massive loads of Bitcoins. This whole latest sell-off, its all a ploy. They are just testing the markets. Getting a feel for how weak we all really R. And now they know. If we all sell off all R Bitcoins, China will buy them all up, and add them to their already massive heaps. Dont fall for the ploy. Keep Ur coins. Stay strong fellow BTCers. we will make it through. Those of us who keep R coins will not B working forced to slave away 4 the Chinese in massive mining operations once they rule the world w BTC.

http://s7.postimg.org/4fqkdtcqz/china_internet_jpeg.jpg

Its interesting that 11 of the 13 largest companies in the world are Chinese banks. They are fearful of the success of bitcoin.

Hi Oblong Meteor

Let me take this time to explain to you in no uncertain terms what is going on here.

Bitcoin in China has been relegated to the status of QQ Coins.

QQ Coins developed from the QQ Messenger platform in the early 2000s, and functioned as a way to buy and sell virtual items in games, to upgrade to the next level of a video game, to get that special shield that you would otherwise have to wait to Level 50 to acquire. QQ Coins are more similar to Craftcoins in their usage today in China, rather than Bitcoin's much more open use abroad.

China's government in 2009 felt QQ Coins were becoming too much of a potential threat to the renminbi, and in 2009 decreed QQ Coins as a fictional currency. Needless to say, QQ Coins were leashed in China from that day.

This week saw China's government use the exactly same terms, 虚拟货币, or fictional, theoretical, virtual currencies. But the tone of the words is more towards fictional since they talk about the need to education the people of what a "correct" currency is.

Chinese people cannot use QQ Coins to purchase any real goods and services. That includes Baidu, that includes Jiangsu Mobile, China Mobile, everything. Real products and services offered by these companies cannot be purchased with "fictitious" currencies.

This is why Jiangsu Mobile changed their website to remove any mention of accepting Bitcoin payments.

Bitcoin now is of the same legal and utility status as QQ Coins in China now. All the above companies now would not dare accept Bitcoin as payment for any real goods and services, due to the People's Bank of China and joint regulatory commission decree. Any legal company in China would not dare accept Bitcoin as payment for any real goods and services under the current regulations.

For further details, refer to http://squawkonomics.com/2013/12/05/bitcoin-gets-qq-coined-in-china-pboc-and-regulatory-commissions-statement-highlights/

Price recovery has to do with traders and nothing with government.

Since you actually seem to know what you're talking about, can you clarify your opinion on whether this is good news or not? I'm having a hard time separating the fact from the fiction - some seem to say "this is a wonderful endorsement of Bitcoin, unicorns and rainbows will follow" and others seem to be more ... hesitant. To me, the statement you have translated above (and the subsequent ones in this thread) do not appear to be good news for Bitcoins adoption especially in this huge emerging market and the subsequent price recovery seems presumptuous. However, I cannot ignore that the price has recovered and - as above - my inability to separate truth from fiction regarding this announcement doesn't really help bring clarity to these muddy waters.

I'd really appreciate your candid view.

No problem, only fictitious institutions are barred. The price has been corrected now after the false alarm.

Is this going to effect Baidu accepting btc for a payment?

Now bitcoin price is gone up again.

Now trading as 1 BTC = $1140


Told ya dude, BitCoin price will rise again!

True and the chinese issue hits at both utility and privacy.  Notice how they want all exchanges to aml and want banks to have nothing to do with bitcoin which means they can refuse to work with exchanges.  It's interesting that the chinese went the opposite route of US where in US we got trusts and official bitcoin denominated investments and chinese want nothing to do with that.  It's more likely they want the yaun to become reserve currency and don't want bitcoin to interfere with their plans.

That caused the today's bitcoin price fall. China are a new and important market and with this move the china involvement in bitcoin market is limited. I wonder what will happen to china's exchangers though as this new rule (or instructions) is against them.