Chinese authorities quashed Bitcoin in their country today. The New York Times reports:
China moved on Thursday to restrict its banks from using Bitcoin as currency, citing concerns about money laundering and a threat to financial stability.
The action comes as monetary authorities around the world have begun to confront the issue of Bitcoin, a virtual currency whose value has soared in recent months as interest in it has spread. Part of its rise has been driven by intense demand for the virtual currency in China.
The notice curtailing financial institutions’ involvement with Bitcoin was issued by the People’s Bank of China and four other ministries and agencies, and the directive said the step was needed to “protect the status of the renminbi as the statutory currency, prevent risks of money laundering and protect financial stability.”
The notice said that Bitcoin was “not a currency in the real meaning of the word” but was rather a “virtual commodity that does not share the same legal status of a currency. Nor can, or should, it be circulated or used in the marketplace as a currency.”
A chart form Bitcoin price tracker Clark Moody’s website shows prices have recovered somewhat, but are still down significantly today on the news.
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