Government to Ban the Use of Virtual Currency in Financial Institutions

Government to Ban the Use of Virtual Currency in Financial InstitutionsThe Chinese government is banning financial institutions from trading using the Bitcoin currency. The move to ban such trading is a move that some analysts are saying is the first step in the regulation of the digital currency which is now gaining popularity in China and has increased in value in the past months,

In a statement made by the central bank along with other agencies said that these computer generated currency is not a threat to the financial system of China but it carries several risks and did not stop the use of the Bitcoin by any individual. The currency’s values drop a little on Chinese exchange after the announcement of the ban but experts are contradicting that the prices might be cut in half in such a short term due to it being highly volatile. The Bitcoin’s value is similar to the dollar which has increased in value around 800 percent in the past two years ad users started to stockpile the currency as reported by botcoinity.org

Although no official data is available the currency operators are saying that Chinese residents are one of the major participants in the market and holds a outstanding share of the total number of Bitcoin in circulation in which Shanghai based BTC China has proven by becoming the largest Bitcoin exchange in volume.

To deal in trade using the virtual currency the government will be requiring the trading platforms to register with telecommunication authorities. And to prevent money laundering using the Bitcoin, traders are required to use their real names in trading Bitcoins.

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