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Chinese banks won't accept Bitcoin as currency

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China won't have its banks dealing in Bitcoin, according to a report from PCMag on Dec. 5. The ban stems from the desire to prevent money laundering and to maintain the financial stability of the country's banks.

Five government agencies issued a warning about the dangers of using Bitcoin, which is strictly a digital currency. As just a digital currency, the agencies warn that is has no monetary equivalent and thus has no place being used in the market. Another warning about the dangers of Bitcoin is how much the exchange rate can and does fluctuate. In fact, LA Times reports that following the news that banks had banned the digital currency, Bitcoin’s value fell on the Mt. Gox online exchange from $1,240 to $870 early Thursday morning.

The bank worries about a completely unsupervised and unregulated market that runs 24/7 and is able to be influenced by speculators.

Despite the concerns of the banks, Bitcoin isn't banned from use by citizens. Deputy Governor Yi Gang of the People's Bank of China stated that he believes in the freedom of people to participate in the currency, even though the bank won't recognize it as a legal form of tender.

Bitcoin has recently been adopted as an accepted form of currency by various companies, including Baidu, a popular search engine in China, and Virgin Galactic.

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