Regulatory attitudes towards cryptocurrencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency. However, it’s not all bad news – as some authorities are taking a much more positive approach.
In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.
Chinese banks stop handling bitcoin related business
The rumors are true: bitcoin related businesses with Chinese deposit accounts reported receiving verbal notices from their banks last week that transfers to exchanges would no longer be honored, causing bitcoin prices on exchanges worldwide to plunge to their lowest levels in more than six months. Though the move was obviously centrally directed, the People’s Bank of China has yet to make an official announcement, over a week later.
Curiously, the People’s Bank of China announced on 11th April that it would not seek a ban on bitcoin.
China’s government and central bank have been ambivalent about bitcoin from the beginning, resulting in periodic rumors of an impending ban. The spread of crypto-currency among Chinese users has often been cited as the driving force behind bitcoin’s dramatic rise during the latter half of 2013. The Chinese government, on the other hand, is believed to see bitcoin as a threat to capital controls, while claiming that restrictions are necessary to protect Chinese banks from the risk posed by bitcoin.
Bitcoin’s price rebounded above $500 in the week following announcement of the Chinese restrictions. Nevertheless, at least two Chinese exchanges suggested that they might consider moving to other countries if regulatory action made their businesses unsustainable.