Bitcoin prices are surging on Friday, up nearly 20%, after reports in the Chinese press that the governor of the People’s Bank of China, Zhou Xiaochuan, said the government is not going to ban bitcoin. CoinDesk reports that Mr. Zhou, speaking at a conference in Boao, Hainan, said “it is out of the question of banning bitcoin as it is not started by central banks.”
His statement is significant. Stories about China banning bitcoin have been floating around for the past month, but the People’s Bank had not made any public pronouncements. So having the bank’s leader actually address bitcoin, and say something vaguely supportive, is enough to drive up the price of the beleaguered cryptocurrency. However, to our eyes, it appears to be a very carefully crafted statement. The issue, as evidenced by yesterday’s news, hasn’t been whether the PBOC would ban bitcoin, but whether the PBOC, through unofficial rule-making, would prevent Chinese banks from handling bitcoin-denominated business. Even if Mr. Zhou meant what he said, the central bank could still order banks to distance themselves from bitcoin-related business. Still, a more friendly stance from the PBOC, or any official-type agency, in whatever form it takes, is welcome news for cryptocurrencies in general. (Paul Vigna) - Bitcoin took some more baby steps toward recognition on a skeptical Wall Street this week, when it showed up as payment option for attendees of the Security Traders Association of New York’s annual dinner and conference.
