Have you heard of the Bitcoin in news? Do you know what the ban on Bitcoin by China implies? Are you facing difficulty in sending money via Bitcoin through the international money transfer company in Hong Kong?
Bitcoin is being increasingly used in the domestic and the foreign markets. It is a currency instrument which is unregulated and uncontrolled in the currency market. Recently, it has been in use for giving encouragement to the activities like money laundering and other financial crimes. And very recently China has put a ban on the use of the bitcoins.
This article will discuss everything you need to know about the Bitcoin and how the ban on the use of the Bitcoin affects does the international money exchange and the international money transfer company in Hong Kong.
The regulators in China have announced a blanket ban on all kind of trading of Bitcoins on the exchange. The credit situation in China and the ability of the central bank to control and regulate the financial situation was getting difficult due to the use of Bitcoins. It was also getting difficult to regulate the international money transfer company in Hong Kong.
This uncertainty in the financial market led the Chinese authorities and the central banks to block the use of the Bitcoin so as to control the market in a better way.
What is Bitcoin?
Bitcoin is a cryptocurrency that can be used worldwide and it is also the first decentralized digital payment system in the world. There is no regulator. No intermediaries are involved and the transactions through the Bitcoins take place in an unregulated and open interface. Users can directly connect to each other and transact using the Bitcoin.
You can exchange the Bitcoins in lieu of the other currencies, products and services. Since there is no regulation on the use of Bitcoin, different countries have granted varied legal status to the Bitcoin.
The value of the Bitcoin has been rising continuously and this has led to its increased use. China saw its unprecedented use and therefore there came a time when the use of Bitcoin in China increased so much that it accounted for almost 90 percent of the total trade in Bitcoin globally. Bitcoin was also used by the international money transfer company in Hong Kong and China.
Bitcoin market in China became very dominant and it started leading to the capital outflows, thus harming the economy of the China and the Hong Kong.
Hong Kong is a part of the People’s Republic of China. More specifically it is a special administrative region of China. It is an autonomous territory in China.
The rise in the use of Bitcoin in China was a sign of decreasing trust of the people of China in the standard government regulated monetary systems. Also, there are huge fluctuations in the Bitcoin market and the speculations regarding the market are also high. The foundations of the Bitcoin trading are very fragile and therefore this sudden ban on the Bitcoin use has led to a fall in all this speculation.
The current Bitcoin transactions are more in the form of underground financial activities and thus this ban will put a full stop on all the unregulated money transfer – domestic or international.