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Bitcoin Loses Steam As China Clamps Down On Crypto-Currencies

Bitcoin is a digital currency i.e. it has no banknotes and coins, and which has no central regulatory body.

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Bitcoin Loses Steam As China Clamps Down On Crypto-Currencies

Reserve Bank of India said this week that it was not comfortable with Bitcoin

As one of the biggest bitcoin exchanges in China stopped trading following new Chinese Government rules shutting down all virtual currencies, Bitcoin's international value plunged by nearly a third from the record highs it had hit this month. Chinese Bitcoin exchange - BTCChina - said on Thursday that it would stop all trading from September 30. On a U.S. exchange Bitstamp, the value of Bitcoin slid as much as 10 per cent to a five-week low of $3,426.92 (about Rs 2.19 lakh), having hit a record high of nearly $5,000 on September 2.

BTCC -- China's second bitcoin platform in terms of volume and the world's third largest -- said on its Twitter account that "after carefully considering" the announcement by Chinese regulators, it will "stop all trading" on September 30.

Bitcoin is a digital currency i.e. it is a type of currency that is non-physical, of which no banknotes and coins exist, and which has no central regulatory body. Bitcoin became popular worldwide after the Financial Crisis of 2008.

Bitcoin's main rival "ether" was also down around 10 per cent this week, according to a Reuters report.

As Bitcoin and other crypto-currencies can be bought and sold without any government intervention, China's move is being seen as a way for Beijing to gain control over crypto-currencies. On Wednesday The the National Internet Finance Association of China, which was created by the central bank,
reportedly said on its website that such currencies are "increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising".

This week the Reserve Bank of India (RBI) also said that it was not comfortable with Bitcoin and has a group looking into cryptocurrencies as legal tender. "Any user, holder, investor or trader dealing with virtual currencies is doing it at their own risk," the RBI had cautioned on its website in February this year.

Jamie Dimon, chief executive of JPMorgan Chase & Co, also came out strongly against bitcoin this week dubbing it a "fraud", and adding that it will blow up.
 

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