The People's Bank of China (PBC), the nation's central bank, held talks with a number of domestic Bitcoin trading platforms on Wednesday and banned them from doing activities like illegal financing and participating in money laundering.
Experts that the Global Times interviewed on Thursday held diverse views as to the prospects of Bitcoin in China, with one expert saying that Bitcoin is going to gain popularity within a few years and another saying that it will never become fully legal.
The nine trading platforms the PBC talked to on Wednesday, including btctrade.com, yunbi.com and yuanbao.com, were banned by the central bank from doing business that violates government regulations on foreign currency management, payment settlement and taxes, according to a statement released by the PBC on Thursday.
Bitcoin platforms that don't meet those requirements will be shut down, the PBC noted.
The operations office of the PBC investigated two major Bitcoin trading platforms -- huobi.com and okcoin.cn -- in January, the PBC statement showed.
Trading of Bitcoin, a virtual currency, has been conducted in China without much supervision, according to Liu Xingliang, head of the Data Center of China Internet, a Beijing-based Internet research organization. Liu said that Bitcoin management is a "gray area" in China, largely because it is so new that the government is at a loss in dealing with it.
The absence of regular supervision has also given rise to some illegal trading on Bitcoin platforms. Previous government inspections showed that some Bitcoin trading platforms, including huobi.com and okcoin.cn, had engaged in illegal fund allocation business, the Beijing News reported on Thursday.
Li Yi, a senior research fellow at the Internet Research Center under the Shanghai Academy of Social Sciences, said that most central banks, including the PBC, have shown a welcome attitude toward blockchain, the underlying technology behind Bitcoin. "It's not Bitcoin that the PBC objects to. Instead, the PBC wants to suppress blind investment and illegal activities, like money laundering, on Bitcoin platforms," Li told the Global Times on Thursday.
He also said despite its risks, Bitcoin, with its high level of technology, represents an irreversible trend.
"I predict that virtual currencies like Bitcoin will be widely circulated in China, especially in first-tier cities, alongside real currencies," Li said, adding that China has already become the world's largest Bitcoin trade market.
Liu, however, said he was not optimistic about the prospects of Bitcoin trading in China. "If Bitcoin trading is made legal in China, it will completely overturn the current financial management system," he told the Global Times on Thursday.
Bitcoin was valued at about 7,479 yuan ($1,091) as of 6 pm Beijing time on Thursday. It dived to about 6,900 yuan on Wednesday afternoon.
