China bans banks from bitcoin transactions

On December 5, 2013, the People’s Bank of China (PBoC), along with other financial watchdogs and the nation’s IT ministry, issued a joint notice effectively banning banks from engaging in Bitcoin transactions.
 

The notice declared that Bitcoin was a “virtual good,” lacking the legal status to be considered a currency. The ban was primarily imposed because Bitcoin was not backed by any nation or central authority, which raised concerns about its use in money laundering activities.
 

The ban prohibited financial institutions in China from trading, underwriting, or offering insurance in Bitcoin. While the central bank did not outlaw or prohibit individuals from owning Bitcoin, the guidelines specified that it was not to be considered a currency.