|Chinese Banks Ban Bitcoins|
|by Tom McGregor||Thu, Dec 5, 2013, 08:29 PM|
BEIJING: Buying and selling bitcoins might be the latest fad, but Chinese banks say, "No Way," when their customers attempt to deposit bitcoins into their checking and savings accounts.
According to BBC News, "China has banned its banks from handling transactions involving the Bitcoin virtual currency. The ban by the People's Bank of China, financial watchdogs and the nation's IT ministry. Bitcoins were a "virtual good", had no legal status and should not be used as a currency, it said."
The ban comes as expected just by using some common sense. Unless all merchants and service providers pledge to accept bitcoins as currency for payment, this form of cash would not be feasible.
As reported by BBC News, "The ban was imposed because bitcoins were not backed by any nation or central authority, said the notice. It added that it was planning to step up its efforts to curb the use of bitcoins to launder cash. Individuals were still free to trade in bitcoins but should be aware of the risks involved, said the People's Bank of China (PBOC), adding that it planned to formalise the regulation of exchanges that dealt in the digital cash."
Many governments and economist fear that if bitcoins do not get reigned in, they could spark a so-called 'Tulip Craze.' This is referred to as a bubble when the public jumps into investments that appear foolish. A few centuries ago, many Europeans purchased tulips as prices soared but those investments later crashed and impoverished millions of people.
To read the entire article from BBC News, link here:
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