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Chinese government outright rejects Bitcoin as currency

China’s central bank and five other government ministries today announced Bitcoin is not money, and it should not be used as currency in the market. However, the notice (webpage in Chinese) says, “Using bitcoins as a trade commodity on the internet, ordinary people have the freedom to participate at their own risk.”

The notice stipulates that financial and payment institutions are not allowed to accept bitcoins for products or services. Bitcoins cannot be used to exchange legal tender for foreign currency, pay a mortgage, pay a legal settlement, make investments, or provide insurance.

Furthermore, any Bitcoin-commerce websites must file with the telecommunications regulatory agencies in accordance with the country’s anti-money laundering law. That means their customers must truthfully identify themselves and the websites must make all transaction reports available.

These new rules, says the Bank of China, will “guide the public to establish a correct concept of money and investment philosophy.”

Prior to this notice, Bank of China vice president Yi Gang said China is unlikely to acknowledge the legitimacy of Bitcoin in the near future.

While this announcement doesn’t necessarily shut Bitcoin out completely, it is a major new obstacle for a country that as of late has led Bitcoin’s rise.

This article by Paul Bischoff originally appeared on Tech in Asia, a Burn Media publishing partner.

Author | Tech In Asia

Tech In Asia
Tech in Asia is an online technology news startup based in Asia, with team members all across the region. As a crew of journalists and bloggers with a passion for new ways of delivering the news, we’ve bonded together under one goal – to create a great Asia-focused tech... More