Will China's recent crack down on Bitcoin (prohibiting financial institutions in China from trading, underwriting or offering insurance in it) impact it’s near-term and long-term value?
It's times like these that you are glad that you can read Chinese, and not have to deal with clueless English newspapers. I summarized the PBC announcement
@Is the news out of China about banks & bitcoins good or bad news?
It's excellent news for bitcoin. Essentially bitcoin exchanges in China and bitcoin itself is going to be treated as a "commodity" rather than a "currency" and therefore not going to be subject to banking and currency control regulations. The only restrictions on bitcoin exchanges is that they will be subject to the standard internet censorship rules and they will need to get the identity of all users to prevent money laundering. Existing financial institutions will not be able to trade bitcoin, but this is a great thing for entrepreneurs.
Also, more excellent news out of Hong Kong. An HK bitcoin exchange basically shutdown and stole everyone's money. This is excellent news because within days, they have been caught and are likely going to go to jail. I'm very, very optimistic about Hong Kong "leading the way" for bitcoin.
The other good news is that the Chinese government understands bitcoin. According to the notice.
Bitcoin has the following four characteristics:
- there is no central issuing authority
- the total amount is limited
- it is not geographically limited for acceptance
- it is anonymous
According to the PBC, bitcoin is not a "true" currency because
- there is no central issuing authority
- there is no legal requirement that anyone accept bitcoin
Bitcoin is therefore a virtual commodity, and therefore is not subject to the laws regarding currency transactions, nor should circulate as a currency.