News Column

Bitcoin Banned in China

January 10, 2014

Cape Argus (South Africa)

bitcoin
China's largest online marketplace has blocked the sale of bitcoin in the world's No. 2 economy (file photo)

BEIJING: China's biggest online marketplace, Alibaba Group Holding Ltd's Taobao, will ban the sale of bitcoins on the heels of a government crackdown against the virtual currency to plug a potential gap in its tight controls on capital flows.

The move comes as Alibaba, China's biggest e-commerce company, seeks the smoothest of rides toward a giant initial public offering of stock expected later this year. In a statement posted on its website late on Tuesday, Taobao said the ban was effective from January 14.

Taobao's move to fall in line with the government's wishes also comes as Alibaba presses on with efforts to stamp out the sale of fake goods in the online marketplace. Alibaba has been conservatively estimated to be worth more than $100 billion (R1 067bn).

"The central bank clearly has required third-party payment services to close bitcoin trading channels," Taobao said, without disclosing any details on bitcoin sales through its platform up to now. Backed by neither a government nor a bank, bitcoin has attracted currency speculators in recent months.

Alibaba spokeswoman Florence Shih said: "In the interest of consumer protection, Taobao has banned the sale of bitcoins on the platform."

Taobao uses Alibaba's online payment affiliate Alipay to process transactions across the world's second-biggest economy, handling more than 1 trillion yuan ($165 billion) in annual sales volume together with its sister shopping portal T-Mall.

The Taobao ban, which covers other virtual currencies, also includes the sale of any guides, computer hardware or software related to bitcoin "mining". In the mining process users can mint new bitcoins of their own by having a computer solve complex mathematical problems.

Most bitcoin sales take place on specialised electronic platforms, rather than online marketplaces like Taobao that are designed to trade the virtual currency for physical currencies.

In December, the People's Bank of China barred financial institutions from trading in bitcoins, saying the government would act to prevent money laundering risks. - Reuters

Cape Argus

(c) 2014 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by Syndigate.info, an Albawaba.com company

Original headline: Bitcoin bites the dust in China


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Source: (c) 2014 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by Syndigate.info, an Albawaba.com company


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