The central bank of China has warned all institutions from handling Bitcoin related transactions. According to a recent post from Bloomberg, China’s central bank will be regulating the cryptocurrency after an 89 fold-up that sparked heavy investments from within the country.
Since the announcement, the price of BTC has dropped from over $1000 price point, and is currently under just over $870.
“Bitcoin isn’t a currency with real meaning and doesn’t have the same legal status as a currency; The public is free to participate in Internet transactions provided they take on the risk themselves.” The People’s Bank of China stated.
The news shortly comes after former Federal Reserve Chairman stated the Price of Bitcoin is a “Bubble”.
China seems to be worried mainly about the risk of money laundering and actually recognized that although it does not endanger the economy for now, it could definitely pose a threat in the near future should it remain unregulated.
It is interesting to see that China sees the potential threat in Bitcoin in terms of the sovereignty implied by the control over the state currency and the US congress did not so far.
We will be following the news as it unfolds.
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