Leading Chinese bitcoin exchange BTC China launched the country’s first bitcoin ATM and rolled out an online app that allows users to buy and sell bitcoins with their cell phones. This allows users to skirt local regulations that have recently become hostile to digital currencies.
Increasing interest by Chinese speculators was attributed to the surge in the bitcoin prices to at least $1000 in some exchanges. However, recent harsh measures by the People’s Bank of China (PBOC) such as restricting banks from dealing with the bitcoin saw its prices plummet to under $350 yesterday, according to data compiled by CoinDesk.
Bitcoin prices have also taken a hit from negative reputation caused by recent scandals such as fraud, hacking and theft. Japan’s Mt Gox, which until February was the world’s largest bitcoin exchange, filed for bankruptcy and subsequently liquidation after it claimed hackers stole all its bitcoins.
The ATM, which is housed in a cafe in a mall in the Zhangjiang technology park in Shanghai, will enable users to purchase bitcoin directly from BTC China in yuan. However, users won’t be able to sell bitcoins for cash, reported Reuters.
The new web app will facilitate transactions on a straight peer-to-peer basis, rather than selling bitcoins on an open exchange. It eliminates the need for an online exchange or banking network, with transactions conducted between users. Liquidity will be determined by the amount of cash they hold.
Unlike the regular money, bitcoin and other virtual currencies are developed using computers and are not backed by physical assets, any government or central bank. Most authorities have expressed concerns that bitcoin can be used in money laundering or to facilitate narcotics and illegal arms trade. This has seen some of them move in to control or ban their use in regular commerce. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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