Bitcoin

[The70th]

((This should give everyone something to talk about))
((I read this as really good news - keep the banks out, allow the people to stay in - that's the point of Bitcoin, right? - and apparently the Chinese government's opinion too!))

First OFFICIAL document from the Chinese government about Bitcoin!

http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2013/20131205153156832222251/20131205153156832222251_.html


One person's translation (original source):

http://www.reddit.com/r/Bitcoin/comments/1s5hzl/my_human_translation_of_the_china_regulation/

This is the press release. The notice is below

In order to protect the public's property rights, to protect RMB's official currency status, to prevent money laundering risk and to protect financial stability, the People's Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission jointly issued "The People's Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission Notice on preventing Bitcoin risk" (2013 no.289, "Notice" hereinafter)

The Notice clarifies the status of Bitcoin. Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of money, it is not money in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with money, and it cannot and should not be used as money on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.

The Notice requires, at this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering,trading, clearing, settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.

The Notice requires, the Bitcoin websites that act as the main trading platform, should follow the Telecommunications Act and the Regulation on Internet Information Service, and register according to law. Also, because Bitcoin has a higher money laundering risk and the risk of being used by criminals, the Notice requires the relevant organizations to comply with the Anti-Money Laundering Act and fully comply with the legally required anti-money laundering procedures like KYC and suspicious transaction reporting, to prevent Bitocin related money laundering risks.

To prevent virtual goods like Bitcoin using the name of "virtual money" to over-promote, damaging the public interest and the RMB's position as legal tender, the Notice requires financial organizations and payment organizations in their daily tasks to use the correct concept of money, to emphasize on public education about money, and to add to public financial knowledge education the contents of correct knowledge of money, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one's financial safety, in order the public have correct views on money and investing.

In the future, the People's Bank will do its duty and continue to closely monitor the Bitcoin trend and related risks.

EDIT: this is actually the press release introducing the Notice, I'll add the Notice below

People's Bank of China
Ministry of Industry and Information Technology
China Banking Regulatory Commission
China Securities Regulatory Commission
China Insurance Regulatory Commission
Notice on preventing Bitcoin risk

Recently, a so-called Bitcoin calculated using certain computer programs gained widespread worldwide attention, there are also organizations and persons in China taking this opportunity to promote Bitcoin and related products. In order to protect the public's property rights, to protect RMB's official currency status, to prevent money laundering risk and to protect financial stability, according to the People's Bank Act, the Anti-Money Laundering Act, the Commercial Bank Act, Telecommunications Regulations etc, the following notice is made:

1 Correct knowledge of Bitcoin

Bitcoin has four main characteristics: no central issuer, limited quantity, no geographical limits and anonymity. Although it is called money, it is not issued by a monetary authority, it does not have the status of legal tender and obliged payment status of money, it is not money in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with money, and it cannot and should not be used as money on the market.

2 Financial institutions and payment institutions must not start Bitcoin related business

At this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering,trading, clearing, settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.

3 Strengthening regulation of Bitcoin websites

According to the Telecommunications Act and the Regulation on Internet Information Service, websites that provide Bitcoin services like registration, trading etc should register with the telecommunications regulation authorities.

The telecommunications regulation authorities, following the determinations and punishment opinions of the relevant management authorities, close down illegal Bitcoin sites according to law.

4 Prevent possible Bitcoin money laundering risk

Branches of the People's Bank should closely monitor the trends and activities Bitcoin and other similar virtual commodities with the characteristics of anonymity and easy cross-border access, seriously consider its money laundering risk, research and implement targeted preventative measures. The branches should include lawfully established organizations that provide Bitcoin registration or exchange services in its area into its anti-money laundering monitoring, and supervise them to strengthen anti-money laundering monitoring.

Bitcoin websites should earnestly implement their anti-money laundering duty, confirm the identities of their users, register their real names, register their name and ID card number. If financial institutions, payment institutions or Bitcoin websites discover suspicious transactions involving Bitcoin or other virtual commodities, should immediately report it to the China Anti-Money Laundering Monitoring and Analysis Center, and cooperate with the People's Bank's investigation; if they find evidence of fraud, gambling, money laundering using Bitcoins, they should report it to the police.

5 Strengthening public education on money knowledge and investment risk

Departments, financial organizations and payment organizations should in their daily tasks teach the public the correct concept of money, to emphasize on public education about money, and to add to public financial knowledge education the contents of correct knowledge of money, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one's financial safety, in order the public have correct views on money and investing.

Financial monitoring authorities can set implementation details according to this notice

Can the People's bank branches please distribute this Notice to financial organizations and payment organizations in their area. Any new situations or questions arising from this notice please report to the People's bank.