Bitcoin cannot be used as currency

Products or services may not be priced in Bitcoin

In order to protect the property rights and interests of the public, safeguard the legal tender status of the RMB, prevent money laundering risks, and maintain financial stability, the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission recently jointly issued a notice on preventing Bitcoin risks. The "Notice" clarifies the nature of Bitcoin, stating that Bitcoin is not issued by monetary authorities, does not have monetary attributes such as legal compensation and compulsion, and is not a real currency. In terms of nature, Bitcoin is a specific virtual commodity that does not have the same legal status as currency and cannot and should not be circulated and used as currency in the market. However, as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in Bitcoin transactions on the premise of assuming their own risks.

The "Notice" requires that, at this stage, financial institutions and payment institutions shall not price products or services in Bitcoin, shall not buy or sell Bitcoin or act as a central counterparty to buy or sell Bitcoin, shall not underwrite Bitcoin-related insurance business or include Bitcoin in the scope of insurance liability, and shall not directly or indirectly provide customers with other Bitcoin-related services, including: providing customers with Bitcoin registration, trading, clearing, settlement and other services; accepting Bitcoin or using Bitcoin as a payment and settlement tool; conducting Bitcoin and RMB and foreign currency exchange services; conducting Bitcoin storage, custody, mortgage and other businesses; issuing Bitcoin-related financial products; using Bitcoin as an investment target for trusts, funds and other investments, etc.

Protecting against money laundering risks associated with Bitcoin

The Notice stipulates that Bitcoin websites, which are the main Bitcoin trading platforms, should be registered with the telecommunications management agency in accordance with the provisions of the Telecommunications Regulations of the People's Republic of China and the Internet Information Service Management Measures. At the same time, in view of the high risk of money laundering and the risk of being used by criminals, the Notice requires relevant institutions to fulfill the legal anti-money laundering obligations such as customer identity identification and suspicious transaction reporting in accordance with the requirements of the Anti-Money Laundering Law of the People's Republic of China, and effectively prevent money laundering risks related to Bitcoin.

In order to avoid excessive speculation in virtual commodities such as Bitcoin in the name of "virtual currency", which would damage the public interest and the legal tender status of the RMB, the "Notice" requires financial institutions and payment institutions to correctly use the concept of currency in their daily work, focus on strengthening the education of the public on currency knowledge, and guide the public to establish correct currency concepts and investment concepts.

The central bank said that the People's Bank of China will continue to closely monitor the trends and related risks of Bitcoin.

According to Xinhua News Agency

Expert: This is to protect domestic investors

As for why the central bank is now defining and positioning the popular virtual currency, Tan Yaling, president of the China Foreign Exchange Research Institute, said that Bitcoin is a popular virtual currency on the Internet. It has no territory. In addition, there was a global currency surplus before, and everyone was looking for channels for global currency arbitrage. This will increase the risks in the financial market and bring great losses to speculators because its uncertainty is too great. Other countries have intervened and resisted the liquidity of Bitcoin before.

Yuan Xuya, director of the Zhongyuan Securities Research Institute, told reporters that a country can only have one currency in circulation. If Bitcoin is also in circulation, that is, there is a second currency circulating in the same country, then the entire economy will be in chaos. The central bank is protecting the status of the renminbi as the only currency that can be circulated in China and protecting economic stability.

The notice states that ordinary people have the freedom to participate under the premise of bearing their own risks. In response, Tan Yaling said that Bitcoin is an international virtual currency with no territory, and the Chinese government has no right to interfere, so it reminds participants. "This is also to protect investors, because China's technical identification ability is relatively poor."

So, will domestic investors who are enthusiastic about Bitcoin in China suffer greater losses? Tan Yaling believes, "It depends on whether the investors understand it. If they just follow the trend, the risk is very high. If they understand it, they can operate it themselves. It depends on the investors' ability to handle and deal with it."

Our Beijing correspondent Gu Zherui

Local players say "little impact on the market"

"Why did it fall so fast? One bitcoin was nearly 7,000 yuan this morning, but now it's only 4,800 yuan?" Yesterday, many people in a bitcoin QQ group with 130 members asked. At around 4 p.m., a group member posted a screenshot of the news that "the central bank and five other ministries jointly issued a document to warn of risky regulation of bitcoin", which immediately ignited the group discussion.

Netizen "Lang Gege" said: "The attitude of the regulatory authorities is neither support nor opposition." Netizen "Zi Yu" lamented, "It jumped too fast, I felt that the computer could not react, and I dared not buy the bottom." Some netizens said that they sold all their stocks as soon as the policy came out at 4 o'clock, no matter how much they lost. Some netizens still insist on the investment value of Bitcoin. "Yi Yi Ting Hua" believes that "the decline is temporary. If you are not afraid of heartbeats, you can try it. Any big rise or fall is a time to make money."

"Although it is negative, it has little impact on the market. The regulators are mainly warning of risks and do not allow financial institutions to participate. Ordinary people can still participate freely." Mr. Lei, a senior Bitcoin player in Xi'an and general manager of a cleaning company, said that once the policy is released, the number of participants may be affected. The market will fluctuate in the short term. "The price of Bitcoin itself is like a roller coaster, and it is inevitable to rise and fall sharply." He said. Huang Tao, a reporter from this newspaper

Investors who blindly follow the trend are prone to suffer heavy losses

——The head of the relevant department of the central bank explained Bitcoin in detail

Regarding the recent hot topic of Bitcoin in the market, the head of the relevant department of the People's Bank of China accepted an interview with reporters on the 5th.

Question: How does my country currently define the nature of Bitcoin?

Answer: Although some people call Bitcoin "currency", it is not issued by monetary authorities and does not have monetary attributes such as legal tender and compulsory nature. It is not a real currency.

Q: Where are the risks of Bitcoin currently concentrated? Will it have an impact on my country's existing financial system?

A: Currently, the public still lacks sufficient understanding of Bitcoin. As Bitcoin is a specific virtual commodity, it may have the following risks:

First, there is a high risk of speculation. Ordinary investors who blindly follow the trend are likely to suffer heavy losses. At the same time, the relevant trading market of Bitcoin is still in a spontaneous state, and there may be risks in counterparties, fund security, and clearing and settlement links, etc., and the legitimate rights and interests of investors are difficult to be effectively protected.

Second, there is a high risk of money laundering. As Bitcoin transactions are anonymous and not subject to geographical restrictions, the flow of funds is difficult to monitor, which facilitates money laundering and terrorist financing activities. Third, there is the risk of being exploited by criminals or organizations. At present, there have been crimes such as drug and gun transactions using Bitcoin internationally. At the same time, some Bitcoin trading websites have not been legally registered and are suspected of illegal operations; some websites have poor security and risk resistance, and are prone to hacker attacks or website operators absconding with funds.

Judging from the current situation, the risks associated with Bitcoin have not yet reached the level of impacting my country's financial system.

Chinese buyers become the "big players" in global transactions

According to data from Bitcoin statistics website BitCoinCharts, based on the platform transaction volume within 30 days in November, the Chinese "Bitcoin China" platform has reached nearly 1.8 million bitcoins, leading the second-place Japanese platform by nearly 700,000. The total volume of bitcoin transactions settled in RMB accounts for 61.73% of the global total bitcoin transactions. The data shows that Bitcoin is being sought after by investors holding RMB.

However, industry insiders said that the bitcoin trading industry is developing rapidly, but it is still in its early stages. Ordinary investors still face security risks when participating in transactions, such as computer Trojans and remote control of keyboard input. These transaction risks need to be regulated. Many people blindly use bitcoin as a way to invest in financial management, which shows that the investment channels for Chinese people are still narrow. Xinhua

Greenspan: Bitcoin has no intrinsic value

Former Federal Reserve Chairman Alan Greenspan recently said that Bitcoin has risen 89 times in a year, and the price is too high to be sustained, and it is not a currency. "This is a bubble. Bitcoin must have intrinsic value. You must use your imagination to imagine the intrinsic value of Bitcoin. I have never been able to do this, but maybe someone can."

Greenspan said, "I can't understand where the support for Bitcoin comes from. Bitcoin itself has no intrinsic value, and no one or government guarantees it."

Federal Reserve Chairman Ben Bernanke told the U.S. Senate that the Fed has no plans to regulate Bitcoin. "While the Federal Reserve is concerned about the development of virtual currencies and other innovative payment systems, this does not necessarily mean that the Federal Reserve has the authority to directly intervene or regulate these innovations or the institutions behind them," Bernanke said.

Bitcoin plummeted after hearing the news

At its most expensive, one Bitcoin could buy 28.35 grams of gold

Yesterday, the central bank and five ministries jointly issued a notice to regulate Bitcoin. Bitcoin plummeted rapidly. As of 5 pm, the price of 1 Bitcoin had fallen to around US$1,030. The RMB-denominated Bitcoin fell to around RMB 4,520, a drop of more than 20%. It has since begun to rebound.

Bitcoin has been popular since the beginning of this year. From the beginning of this year to April, the price of Bitcoin soared from $13 to $250. On November 27 this year, Bitcoin broke through the $1,000 mark. Last Friday, one Bitcoin on the Mt.Gox platform even rose to $1,242, setting a record high. One Bitcoin can already buy 28.35 grams of gold.

However, while the price of Bitcoin has skyrocketed, it has experienced three sharp declines since the middle of this year, with declines of more than 30%. The most recent one was last Friday. As of 17:00 on the 4th, the price of a Bitcoin on Mt.Gox was $1,086.74, while the highest price of $1,170.22 and the lowest price of $840.32 on the same day showed a fluctuation of nearly 40%. Relevant sources said that many Bitcoins were sold to buy gold coins and silver coins and bars.