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The price of bitcoin has crashed slightly following the breaking news that China is effectively banning the use of Bitcoin to carry out business for financial companies.
The People’s Bank of China has said that bitcoin doesn’t quite have a “real meaning”, and individuals should take caution if investing or using it. The story with financial institutions, however, is different. The central bank is banning the use of bitcoin for these companies.
“The concern is that it interferes with normal monetary policy operation,” said lead researcher Hao Hong from the Bocom International Holdings company in Hong Kong. “It represents an unofficial leakage to the current monetary system and trades globally. It is difficult to regulate and could be used for money laundering. I think the central bank is right to make this move.”
Despite the crack-down, exchange websites like BTC China remain open for business.
Bitcoin reached a low of $870 following the news, but has since climbed past the $1000 USD mark. The main concern now is whether this development will domino into other countries, who will implement similar bans. We’ll keep looking out.
