A specter is haunting China. virtual capitalism. Once accepted - and welcomed - the real one, the new battle of the People's Republic of the late Mao Zedong is against the immaterial currency: the Bitcoin.
Beijing has banned its banks from using Bitcoin as currency, expressing concerns about increased risks associated with money laundering and, above all, because it would threaten the country's financial stability, according to reports from the New York Times.
In reality, the move comes as monetary authorities around the world begin to grapple with Bitcoin, a virtual currency whose value has skyrocketed in recent months. Part of this rise is due to the growing demand from China.
The request to make virtual currencies disappear from financial institutions was made by the Bank of China and 4 other ministries and agencies. In the official note, it is known that this step was necessary "to protect the status of the renminbi as a currency, prevent the risks of money laundering and protect financial stability".
Furthermore, Bitcoin has been called “not a currency, in the proper sense of the word,” but rather “a virtual instrument that does not have the same legal status as a currency. Nor can, or should, circulate or be used in the market as money.
One of the factors that had made Bitcoin take off was the de facto recognition by the US regulator, who in a hearing in the US Senate had established that financial networks such as virtual currency offered benefits to the financial system. But, even in that case, Washington had denounced the risk of money laundering or criminal activity related to Bitcoin.
The Chinese move comes after some officials of the People's Republic expressed support for the legitimacy of Bitcoin. Yi Gang, deputy governor of the Bank of China and director of the Foreign Exchange Agency, said in November that the currency, while it may not be welcomed by the central bank, could be traded freely in the market.
In China, Bitcoin was becoming increasingly popular with traders. In Beijing's Chaoyang district, a restaurant had begun accepting virtual currencies in defiance of the rule that this type of currency could not be used to exchange material goods or services.
Meanwhile, Beijing's decision caused the already volatile Bitcoin to collapse, the value of which fell by 30%, from $1240 to $870. He reports it Business Insider.
