Currency bitcoin has crashed since the Bank of China and five ministries issued restrictions on how to use the digital currency, warning that the digital currency neither has ‘real meaning as a currency’ nor the same legal status.
Initially, the Chinese embraced the bitcoin, though since Chinese authorities said in early December that they would restrict its usage in the world’s second largest economy, the value of bitcoin has tumbled.
LocalBitcoins.com, which sells bitcoins in the UK, lists one bitcoin for sale for £427.95 (€511.9). In October, bitcoin became the world’s most expensive currency in per unit value at $1,000 (€730.6).
An official statement by the Chinese says financial institutions and payment institutions should “employ the concept of proper money”.
In a move to limit investment risk and safeguard individual property, the statement highlights that bitcoin and other virtual currencies that are used for excessive speculation are posing a risk to the public interest and the legal status of the renminbi.
The statement was issued jointly by the People’s Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission.
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