Bank of America, China on opposite ends of Bitcoin value

By Kyle Johnson,

Both the Bank of America and China offered their opinion of the virtual currency, Bitcoin, but they ended up on opposite sides.

According to USA Today, China has banned the virtual currency from being traded by Chinese banks. The People's Bank of China said in a statement that Bitcoin has no "real meaning."

The price of a Bitcoin dropped to less than $1,000 after the news that the currency was outlawed in Chinese financial institutions. The difference from before and after the announcement was about $160. While banks may not use the currency, China did not outlaw the personal use of Bitcoins.

The New York Times reports that China also said the restriction of Bitcoin usage was to "protect the status of the renminbi as the statutory currency, prevent risks of money laundering and protect financial stability."

USA Today notes Bank of America felt differently, saying that Bitcoin had the potential to be a "serious competitor" to normal money transfers. The worry is that value of Bitcoins fluctuate wildly, with the currency being introduced for less than $1, but raising as high as $1,300.

Federal Reserve Chairman Ben. Bernanke also spoke positively about Bitcoin to Congress in November. The Fed chairman say that virtual currency "may hold long-term promise." Though not everyone agrees, with Alan Greenspan saying that it's merely "a bubble" as Bitcoin lacks "intrinsic value."

image: Wikimedia Commons


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