By Scott Thiel, Heng Loong Cheong and Joel Davis
Last December, bitcoin prices plummeted by nearly half, after Chinese authorities banned all financial institutions and payment processor companies in China from engaging in bitcoin-related business, denominating prices in bitcoins and providing bitcoin trading, settlement, clearing or other linked financial products and services. The People’s Bank of China (PBC) has not discussed its stance on bitcoins since the prohibitive announcement.
Being the most widely circulated cryptocurrency since its invention in 2009, an increasing number of users are attracted to the bitcoin network as it allows funds to be transferred from one party to another via the internet in minutes, bypassing any governmental authorities or financial intermediaries such as banks to save transaction time and costs. The bitcoin network is essentially a decentralised payment platform as computers on the network settle transactions among users and act as clearing houses on their own.
China has a planned and highly controlled economy. The ability to circumvent capital movement regulations may be one of the reasons for the bitcoin ban. In other jurisdictions, governments are mindful of the consumer protection issues posed by bitcoins and have expressed concerns that bitcoins are difficult to trace and therefore provide a potential platform for money laundering and illegal fundraising…
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July 09, 2014 at 08:09AM
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