\[news\] Chinese recognise Bitcoin

Kevlar

Wait a minute, wait a minute, WAIT A MINUTE!!!

The Chinese goverment stopped large BANKS from using their massive buying power to snatch up the currency out of the hands of the people and prevent a major disaster, namely the hoarding of Bitcoins at a time when it’s still not distributed enough yet, and this is somehow bad news?

What am I missing?

Ernesto

If the government is putting obstacles, it is because they feel the power of virtual currencies.
I think even “Alibaba” is now accepting Bitcoins, and that’s saying something Alibaba is international market.!! :o

Tuck Fheman

[quote name=“Kevlar” post=“40221” timestamp=“1386272154”]
Wait a minute, wait a minute, WAIT A MINUTE!!!

What am I missing?
[/quote]

That Godzilla is Japanese and not Chinese?

[quote author=Kevlar link=topic=5441.msg40221#msg40221 date=1386272154]
The Chinese goverment stopped large BANKS from using their massive buying power to snatch up the currency out of the hands of the people and prevent a major disaster,
[/quote]

BTW, you must have found a better translation than I did. I had no idea that’s what it meant.

Kevlar

Yep, I was right.

This is GREAT news. Basically China has said, “Bitcoin is A-OK! Go ahead, just don’t refer to it as ‘China’s official currency’!”

Here’s the summary: This is legalization for Bitcoin in China to be bought and sold and traded even for goods and services by everyone except banks and money launderers as long as people don’t claim it is official Chinese currency.

THAT IS WHAT IT SAYS.

Here’s the full translation:

In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, the People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission jointly issued “The People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission Notice on preventing Bitcoin risk” (2013 no.289, “Notice” hereinafter)
The Notice clarifies the status of Bitcoin. Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.
The Notice requires, at this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing or settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
The Notice requires, that Bitcoin websites that act as the main trading platform, should follow the Telecommunications Act and the Regulation on Internet Information Service, and register according to law. Also, because Bitcoin has a higher risk of money laundering and being used by criminals, the Notice requires the relevant organizations to follow the requirements of the Anti-Money Laundering Act and fully comply with the legally required anti-money laundering procedures like KYC and suspicious transaction reporting, to prevent Bitocin related money laundering risks.
To prevent virtual goods like Bitcoin using the name of “virtual currency” to over-promote, damaging the public interest and the RMB’s position as legal tender, the Notice requires financial organizations and payment organizations in their daily tasks to use the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
In the future, the People’s Bank will do its duty and continue to closely monitor the Bitcoin trend and related risks.
Below is the Notice
People’s Bank of China
Ministry of Industry and Information Technology
China Banking Regulatory Commission
China Securities Regulatory Commission
China Insurance Regulatory Commission
Notice on preventing Bitcoin risk
Recently, a so-called Bitcoin calculated using certain computer programs gained widespread worldwide attention, there are also organizations and persons in China taking this opportunity to promote Bitcoin and related products. In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, according to the People’s Bank Act, the Anti-Money Laundering Act, the Commercial Bank Act, Telecommunications Regulations etc, the following notice is made:
1 Correct knowledge of Bitcoin
Bitcoin has four main characteristics: no central issuer, limited quantity, no geographical limits and anonymity. Although it is called currency, it is not issued by a monetary authority, it does not have the status of legal tender and obliged payment status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market.
2 Financial institutions and payment institutions must not start Bitcoin related business
At this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing, settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
3 Strengthening regulation of Bitcoin websites
According to the Telecommunications Act and the Regulation on Internet Information Service, websites that provide Bitcoin services like registration, trading etc should register with the telecommunications regulation authorities.
The telecommunications regulation authorities, following the determinations and punishment opinions of the relevant management authorities, should close down illegal Bitcoin sites according to law.
4 Prevent possible Bitcoin money laundering risk
Branches of the People’s Bank should closely monitor the trends and activities Bitcoin and other similar virtual commodities with the characteristics of anonymity and easy cross-border access, seriously consider its money laundering risk, research and implement targeted preventative measures. The branches should include lawfully established organizations that provide Bitcoin registration or exchange services in its area into its anti-money laundering monitoring, and supervise them to strengthen their anti-money laundering monitoring.
Bitcoin websites should earnestly carry out their anti-money laundering duty, confirm the identities of their users, have them register using their real names, and register their name and ID card number. If financial institutions, payment institutions or Bitcoin websites discover suspicious transactions involving Bitcoin or other virtual commodities, they should immediately report it to the China Anti-Money Laundering Monitoring and Analysis Center, and cooperate with the People’s Bank’s investigation; if they find evidence of fraud, gambling, money laundering using Bitcoins, they should report it to the police.
5 Strengthening public education on money knowledge and investment risk
Departments, financial organizations and payment organizations should in their daily tasks teach the public the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
Financial monitoring authorities can set implementation details according to this notice
Would the People’s Bank branches please distribute this Notice to financial organizations and payment organizations in their area. Any new situations or questions arising from this notice please report promptly to the People’s Bank.

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Ha Ha Ha Ha - thanks for cheering me up.

He He He He …

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Help, can’t stop laughing…

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HA HA HA HA HA HA HA…

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lizhi , I updated the header for clarity and categorisation, You are free to amend my update.

mirrax

[quote name=“Kevlar” post=“40201” timestamp=“1386269802”]
People have such short memories…

China crash == silk road crash.

Just give it a few hours, it’ll recover 80% of what it lost.
[/quote]

You are right, but…wasn’t you one of the most weeping after silk road crash?
Or is my memory bad ;)

Kevlar

[quote name=“mirrax” post=“40620” timestamp=“1386352198”]
[quote author=Kevlar link=topic=5441.msg40201#msg40201 date=1386269802]
People have such short memories…

China crash == silk road crash.

Just give it a few hours, it’ll recover 80% of what it lost.
[/quote]

You are right, but…wasn’t you one of the most weeping after silk road crash?
Or is my memory bad ;)
[/quote]

I don’t know if weeping is the right word. I was saying that Silk Road did nothing but good for Bitcoin, and that as a result of it we’ve seen a major uptrend in adoption, and pointing out how major price movements are highly correlated to Silk Road events. It seems inarguable to me that if Feathercoin suddenly had 10x it’s present market demand, the price would skyrocket just like Bitcoin’s did.

Horizon

But did BTC’s price trend up because 10x the usage of BTC or 10x the investors in BTC. People still aren’t ‘using’ BTC. They’re investing in it and holding and the only reason it’s working now is because more BTCs are flooding the market keeping the buyers happy.

mirrax

Just saw this on reddit:

It’s times like these that you are glad that you can read Chinese, and not have to deal with clueless English newspapers. I summarized the PBC announcement
@Is the news out of China about banks & bitcoins good or bad news?
It’s excellent news for bitcoin. Essentially bitcoin exchanges in China and bitcoin itself is going to be treated as a “commodity” rather than a “currency” and therefore not going to be subject to banking and currency control regulations. The only restrictions on bitcoin exchanges is that they will be subject to the standard internet censorship rules and they will need to get the identity of all users to prevent money laundering. Existing financial institutions will not be able to trade bitcoin, but this is a great thing for entrepreneurs.
Also, more excellent news out of Hong Kong. An HK bitcoin exchange basically shutdown and stole everyone’s money. This is excellent news because within days, they have been caught and are likely going to go to jail. I’m very, very optimistic about Hong Kong “leading the way” for bitcoin.
The other good news is that the Chinese government understands bitcoin. According to the notice.
Bitcoin has the following four characteristics:

there is no central issuing authority 2) the total amount is limited 3) it is not geographically limited for acceptance 4) it is anonymous
According to the PBC, bitcoin is not a “true” currency because
there is no central issuing authority 2) there is no legal requirement that anyone accept bitcoin
Bitcoin is therefore a virtual commodity, and therefore is not subject to the laws regarding currency transactions, nor should circulate as a currency.
Also here are his thoughts on the overall climate in China regarding Bitcoin:
The PBC has basically given the green light for bitcoin trading and exchanges. They are trying to keep bitcoin trading “separate” from the other parts of the financial system so that if bitcoin blows up, then nothing bad will happen. The thing that I think they are worried about is a Lehman style situation in which something blowing up in derivatives brings down the rest of the economy.
The strategy of creating a ring fence around new markets is a very standard one in China. Hong Kong is an entire city that is ring fenced.
Not terribly much. It only started to get on the radar screen a month ago.
The main driver is that there are tons of money in China and no one knows what to do with it all. The traditional investments (real estate and stocks) have been closed off by government action since the government has made it clear they will kill any bubble in the real estate and stock markets. So the money is going into all sorts of “non-traditional” investments. Bitcoin is just one of them.
Geeks. So far it’s not the type of thing that random people will buy.
It’s not very mainstream. However, its taken the Chinese geek community by storm and there are a lot of geeks in China. As with a lot of Chinese things, the fraction of people in China who are geeks is small, but a small fraction times a billion is a lot of people.
No harder than it is to buy anything else online.
Bitcoin has not gotten much mainstream attention and its still something that is with geeks, but you have the perfect storm of a lot of other things. The main thing is that bitcoin has hit China exactly at the time where China is looking at restructuring its entire economy and financial system to move out of low tech industries into high tech ones. It also hit China at just the right time in the credit cycle. China has recovered from the 2008 crash and is just starting to enter into another boom phase (which will last about two to three years before the economy crashes again).
EDIT: Source

Pryderi

So the panic these past 2 days is caused by bad translation and rumors?

Horizon

[quote name=“mirrax” post=“41265” timestamp=“1386441384”]
Just saw this on reddit:

It’s times like these that you are glad that you can read Chinese, and not have to deal with clueless English newspapers. I summarized the PBC announcement
@Is the news out of China about banks & bitcoins good or bad news?
[b]It’s excellent news for bitcoin[/b]. Essentially bitcoin exchanges in China and [b]bitcoin itself is going to be treated as a “commodity” rather than a “currency” [/b]and therefore not going to be subject to banking and currency control regulations. The only restrictions on bitcoin exchanges is that they will be subject to the standard internet censorship rules and they will need to get the identity of all users to prevent money laundering. Existing financial institutions will not be able to trade bitcoin, but this is a great thing for entrepreneurs.
Also, more excellent news out of Hong Kong. An HK bitcoin exchange basically shutdown and stole everyone’s money. This is excellent news because within days, they have been caught and are likely going to go to jail. I’m very, very optimistic about Hong Kong “leading the way” for bitcoin.
The other good news is that the Chinese government understands bitcoin. According to the notice.
Bitcoin has the following four characteristics:

there is no central issuing authority 2) the total amount is limited 3) it is not geographically limited for acceptance 4) it is anonymous
According to the PBC, bitcoin is not a “true” currency because
there is no central issuing authority 2) there is no legal requirement that anyone accept bitcoin
Bitcoin is therefore a virtual commodity, and therefore is not subject to the laws regarding currency transactions, nor should circulate as a currency.
Also here are his thoughts on the overall climate in China regarding Bitcoin:
The PBC has basically given the green light for bitcoin trading and exchanges. They are trying to keep bitcoin trading “separate” from the other parts of the financial system so that if bitcoin blows up, then nothing bad will happen. The thing that I think they are worried about is a Lehman style situation in which something blowing up in derivatives brings down the rest of the economy.
The strategy of creating a ring fence around new markets is a very standard one in China. Hong Kong is an entire city that is ring fenced.
Not terribly much. It only started to get on the radar screen a month ago.
The main driver is that there are tons of money in China and no one knows what to do with it all. The traditional investments (real estate and stocks) have been closed off by government action since the government has made it clear they will kill any bubble in the real estate and stock markets. So the money is going into all sorts of “non-traditional” investments. Bitcoin is just one of them.
Geeks. So far it’s not the type of thing that random people will buy.
It’s not very mainstream. However, its taken the Chinese geek community by storm and there are a lot of geeks in China. As with a lot of Chinese things, the fraction of people in China who are geeks is small, but a small fraction times a billion is a lot of people.
No harder than it is to buy anything else online.
Bitcoin has not gotten much mainstream attention and its still something that is with geeks, but you have the perfect storm of a lot of other things. The main thing is that bitcoin has hit China exactly at the time where China is looking at restructuring its entire economy and financial system to move out of low tech industries into high tech ones. It also hit China at just the right time in the credit cycle. China has recovered from the 2008 crash and is just starting to enter into another boom phase (which will last about two to three years before the economy crashes again).
EDIT: Source
[/quote]

YEP.

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Very incite full, and interesting thread.

Rep++

Horizon

The further context is the global currency war that is in full swing that everyone knows about. Countries have spent billions to fight it. China is in the process of a long quest to make RMB a reserve currency. They had no intention of seeing that quest stumped by BTC. With that being said, that doesn’t mean the government in China doesn’t see value in it (or hasn’t been buying it up). In fact, China has always been a nation of finding value that they can store and hold, hence their gold purchases over the last few years. The Chinese government actually ‘needs’ crypto to combat USD and hedge against USD devaluation since they’ve been watching the value of their investment in the US dwindle over time. But it is not in the interest of the Chinese government to see crypto be used as a currency by the world, let alone their people. I have not understood the philosophy of some very bright people in this forum, much brighter than me, that crypto is in the stage right now to be rolled out as a medium of exchange in mainstream commerce in the midst of a global economy that has the average consumer scared shitless. Overall, China had to be careful here - they had to, direct their market in the proper form - “this is how we want you to use it…” I think moving forward you will see other governments issue similar statements and direct their native market in similar ways, love it or hate it. After all the G20 or whoever you want to insert here is likely to be in agreement in regards to the ‘ball’ (fiat) used to play the currency game. No one wins otherwise. The alternative now is to gain the trust of the mainstream by allowing governments and banks to buy it up as an investment vehicle, a commodity. Over a period of time that value will be contagious and the seed is planted for the next step.