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Central bank in China warns banks of bitcoin risks

bitcoins in China face even more pressure, as the Chinese central bank warns other banks of the cryptocurrency
| Business, Financial & Legal News | Posted: May 8, 2014 4:17 am

The People's Bank of China is limiting bitcoin-related business, and is urging executives from other major Chinese banks to follow suit. Towards the end of 2013, the central bank didn't shun bitcoins, but showed caution regarding the popular cryptocurrency - but that opinion has drastically changed, saying bitcoins are a "tool for speculation."




If major banks in China try to shut down bitcoin transactions, it will create a void that a bank in China should be able to step up and fill.


Since bitcoins aren't centrally regulated by banks or governments, trying to figure out how to deal with them has proven to be extremely challenging. Earlier in the year, the IRS ruled that bitcoins are considered property and not real currency, though that hasn't stopped retailers from accepting bitcoin payments. Despite hiccups along the way, bitcoins continue to gain mainstream acceptance and any type of legislation must be created carefully - yet quickly moving forward.


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