updated 07:17 am EST, Thu December 5, 2013
Potential for money laundering, tricky regulation causes China Bitcoin setback
The Bitcoin virtual currency has received a setback on its path to widespread use, after China's central bank advised against its use by the country's investors and banks. The People's Bank of China (PBOC) warned financial institutions that they should not trade in Bitcoins due to the potential risks associated with the currency.
Financial institutions and payment companies could not give pricing, buy, sell, or offer financial products linked to Bitcoin, according to a PBOC statement received by Bloomberg. The potential for money laundering and the difficulty in regulating the currency compelled the PBOC to effectively ban its use, though PBOC deputy governor Yi Gang has advised that this still allows individuals to freely trade the currency, despite not being officially recognized as a currency. Indeed, a branch of China Telecom is offering pre-orders for the Samsung W2014 mobile phone for pickup on December 20th, priced at 0.1 bitcoin.
Elsewhere, the currency is slowly receiving acceptance. A Texas federal judge declared it as "a currency or form of money" during an SEC lawsuit against one Bitcoin-related company, while various entities have found themselves in trouble for failing to properly license themselves for money transfers.