samedi 7 décembre 2013

Bitcoins in China: the end of a love story ?

The Chinese central bank has issued a warning about bitcoins. According to the Chinese authorities, the bitcoin has no real meaning and no legal protection.

This is a news that come at the moment when bitcoins seem to be successful: for example, a restaurant in Beijing is accepting bitcoins as a way to payb the bill. This is possible, the Chinese central bank has not banned bitcoins, it said that people can use them as long as they are aware of the risk they take.

Avoid money laundering and any other illegal use. What is illegal remains illegal, this is not great news...
Still, there is a lot of bitcoins flowing into China the last few months, this is the reason why the central bank has made this warning.

In the meantime, China Telecom made an offer where users can buy phones using bitcoins while Baidu make it possible to buy its firewal
l using bitcoins.

In China, there are some specific risks, people escape financial controls when they move money overseas. But bitcoins are not regulated: people buy bitcoins with RMB, and then they buy US dollars. It is a way to avoid the rules about currencies in China;
The warning has had effects: since it occured, the value of the bitcoin fell 25% within 2 days. This shows how it is related to China.

The Chinese central bank is not alone. The Netherlands central bank saif that the bitcoin trend even worse than the tulip bubble that occured in Holland three centuries ago, because at the end people at least had a tulip when with bitcoins they will have nothing.

There is no bitcoin central bank, nobody is held liable. Is it a bubble ?

12 millions of bitcoins are available, what is their value. The thing is that the bicoins issuing algorithm is rather cautious, new bitcoins are rare. Bitcoins can be the future of money, or they can be nothing. What is money ? Can you buy an apartment in China with bitcoins ? So far, it is impossible, so maybe bitcoins have no value at all...

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