China Shuts Down Bitcoin Loophole

China Shuts Down Bitcoin Loophole (Reuters)

Bitcoins, an electronic currency not backed by any governmental or corporate institution, were recently the subject of a bi-national currency play. You could pay for a bitcoin in U.S. dollars, and sell it for considerably more in Chinese yuan. The gap for this play peaked on Nov. 19 with a 30% spread. However, bitcoins are still vulnerable to the currency controls of governments. Chinese officials announced last week that commercial banks are forbidden from dealing in bitcoins.