China which accounts for about 23 percent of bitcoin trades and is also home to many of the world’s biggest bitcoin miners, who use vast amounts of computing power to confirm transactions in the digital currency, plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week.
A report in Bloomberg says that the reason to be Beijing’s motivation for the exchange ban is unclear but it comes amid a broad clampdown on financial risk in the run-up to a key Communist Party leadership reshuffle next month. The report says that Bitcoin has jumped about 600 percent in dollar terms over the past year, fueling concerns of a bubble. The People’s Bank of China has done trial runs of its own prototype cryptocurrency, taking it a step closer to being the first major central bank to issue digital money.
Even as China has is mulling to ban Bitcoin, and India’s banking regulator Reserve Bank of India (RBI) has been repeatedly flagging concerns on it while stating potential risks related to financial, legal, customer protection and security, an increasing number of Indians are investing in it every day, said Itsblockchain.com. The concerns about Bitcoin rise high due to the fact that it is anonymous to an extent and the owners may only be tracked down when the bitcoins are converted to regular currency.
“Bitcoins have their own safety system in place wherein it harnesses an individual’s greed for the greater good. A bunch of tech-savvy users termed miners ensure the honesty of the system by employing their computing abilities into a blockchain – a global running tally of each bitcoin transactions. This blockchain spends the same bitcoin twice and prevents it from going rogue and the miners are then rewarded for their efforts through an occasional gift of a bitcoin. The miners keep the blockchain secure without letting counterfeiting become an issue.” says Hitesh Malviy, a Bitcoin expert who runs Itsblockchain.com.