As Bitcoin is still very new, it’s no surprise that lawmakers around the world are scrambling to figure out how to deal with it. One country that has decided on a stance towards Bitcoin is China. The country has already banned its banks from handling Bitcoin trade. According to the Chinese government, Bitcoins are a “virtual good” and therefore should not be used as currency.
Of course, such a ruling doesn’t prevent people in China from trading in Bitcoins, but they do so at their own risk. As Bitcoins don’t require a central bank to operate, the ruling is less of an issue, but folks who are investing in Bitcoin would do well to know that governments are paying close attention to the cryptocurrency.
Individuals were still free to trade in bitcoins but should be aware of the risks involved, said the People’s Bank of China (PBOC), adding that it planned to formalise the regulation of exchanges that dealt in the digital cash.
Experts told Reuters the PBOC was moved to make its decision because Chinese nationals were heavily involved in trading the virtual currency. Many believe this is because it helps them avoid controls on trade in the yuan.