Bitcoin and China

Since the beginning of its operation in 2009, Bitcoin has spread to numerous countries including China whereas of this writing, the value stands at 2,011 yuan or 372.77 US dollars after a recent crash caused by the refusal of deposits by a bitcoin subsidiary Yeepay. The current value is half of what it used to be and is expected to normalize in a few weeks or months. Bitcoin is very volatile by nature but its limited quantity and demand often pushes its value substantially. China’s growing technological aptitude and economy makes the use of bitcoins ideal.

But because of bitcoin’s raw and recent nature, China’s banks and other financial institutions are barred from trading in the virtual currency for fears it can be used in money laundering because bitcoin, like any other currency is prone to theft and fraud by unscrupulous individuals and can be used in trade of illicit goods wherein the transactions cannot be traced conventionally. Bitcoin recently gained notoriety when the online marketplace Silk Road was shut down by the FBI for trading illegal drugs using bitcoins. The currency is also beyond the country’s strict financial monitoring and control and the prohibition is only in effect at least until the country has established solid laws involving its use. Individuals however can freely trade with each other using bitcoins.