Baidu removes Bitcoin ads: price rises above 4,000 yuan instead of falling

After Baidu removed Bitcoin advertisements, the Bitcoin price, which had been sluggish for a month, unexpectedly saw a strong rise.

Between 2:30 and 3:00 a.m. on September 4 , according to quotes from domestic Bitcoin exchange OKCoin , the price of Bitcoin rose directly from around 3,850 yuan per coin to over 4,000 yuan. As of 16:00 p.m. on September 5 , the price of Bitcoin had climbed to 4,094.62 yuan per coin , with the highest price in two days being 4,142 yuan, an increase of more than 7% .

Although this magnitude of increase has happened before with the unstable currency Bitcoin, it is still a counter-trend rise given that domestic search giant Baidu removed all Bitcoin advertisements on August 25 .

Baidu removes all Bitcoin ads  

The Paper ( www.thepaper.cn ) learned from Baidu that related Bitcoin advertisements have been taken offline. This is to comply with the "Internet Information Search Service Management Regulations" issued by the State Internet Information Office on June 25. The regulations require relevant service providers to provide objective, fair and authoritative search results; clearly define the upper limit of the proportion of paid search information pages; and not to seek improper benefits by means such as providing search results containing false information.

Baidu said that the background of removing Bitcoin promotional ads is to protect the interests of netizens and is also part of Baidu's regulation of financial ads. In addition to Bitcoin, the financial fields regulated by Baidu this time include crowdfunding platforms, on-site financing, financial credit, provident fund agency, P2P , precious metal trading platforms, stocks, funds, futures, securities investment, foreign exchange, banks, guarantees and more than 12 other subcategories. The specific action is that all the above categories need to provide more than 10 types of qualification verifications such as bank public account verification, ICP filing and consistency . In addition, Baidu has also completely banned content such as live broadcast rooms and binary options.

Under the influence of the negative news that Baidu has removed all Bitcoin advertisements, it is somewhat puzzling that the price of Bitcoin has exceeded 4,000 yuan.

As for the reason behind this, OKCoin founder and CEO Xu Mingxing said : "Bitcoin is still a niche group. The Bitcoin user base is mainly geeks and is less affected by Baidu. According to our previous user survey questionnaire, Bitcoin users mainly come from introductions by acquaintances. Real users rarely learn about Bitcoin-related dynamics through Baidu, so Baidu's removal of Bitcoin ads has little impact on the industry."

Xu Mingxing said that the Bitcoin market is small and its price is easily affected by various news and fluctuates, such as the application of Bitcoin, the global attitude towards Bitcoin, and compliance issues.

Compared with the impact of Baidu's removal of Bitcoin ads on the market, the central bank's policy direction has a greater impact. As early as December 5, 2013 , the central bank's website issued a "Notice on Preventing Bitcoin Risks", stating that Bitcoin "cannot and should not be circulated and used as currency in the market", and the price of Bitcoin on domestic and foreign trading platforms plummeted. At around 17:00 that day , the price of Bitcoin on domestic trading platforms was around 5560-5720 yuan, down about 18% from the previous day , and down about 28.5% from the high of 8,000 yuan on November 19 , 2013 .

Central bank digital currency concept

At present, the central bank is also researching its own digital currency, and the technology behind it is the underlying technology of Bitcoin, blockchain. The central bank established a digital currency and application research group in 2014. At the end of August this year , the magazine "China Finance" under the supervision of the central bank published an article by Yao Qian, deputy director of the Science and Technology Department of the People's Bank of China and head of the preparatory group of the Central Bank Digital Currency Research Institute, titled "The Prototype Concept of China's Legal Digital Currency", which introduced the concept of digital currency issued by the central bank in the future.

The article clearly states that legal digital currency must be issued by the central bank as legal tender, and it is itself a currency rather than just a payment tool like "Alipay". On the issue of real name or anonymity, the digital currency will implement "voluntary in the front, real name in the back".

Baidu removes Bitcoin ads: price rises above 4,000 yuan instead of falling

The conceptual model of central bank digital currency published in China Finance.

The article points out that as a legal digital currency, it must be guaranteed by national sovereignty. For this reason, the initial consideration in the design of China's digital currency is: led by the central bank, while maintaining the issuance of physical cash, issuing digital currency based on encryption algorithms. Part of M0 is composed of digital currency. In order to fully ensure the security of digital currency, the issuer can use security chips as a carrier to protect the security of keys and algorithm calculation processes.

The article suggests that the overall framework for the issuance of China's legal digital currency can be described as follows: According to the current RMB management principles, the issuance and withdrawal of the central bank's digital currency are based on the "central bank-commercial bank" binary system. The central bank is responsible for the issuance and verification monitoring of digital currency. After commercial banks apply for digital currency from the central bank, they are directly facing the society and are responsible for providing digital currency circulation services and application ecosystem construction services.