China’s central bank warns it doesn’t recognize Bitcoin as a legal currency

Crypto-currency Bitcoin has been making headlines in China recently, especially in the aftermath of BTC China overtaking Japan-based Mt. Gox as the trading system processing the largest volume of Bitcoin, and announcing a $5 million Series A round of investment.

China’s central bank has spoken up in response to the hype around Bitcoin, saying that banks and other financial institutions are not allowed to handle transactions made with the digital currency. It says it doesn’t recognize Bitcoin as a legal currency, but gives the green light for individuals to use Bitcoin online — at their own risk. Meanwhile, any online Bitcoin trading platform needs to register with Chinese telecommunication authorities.

As Bitcoin is anonymous and changes hands electronically, China’s central bank also expressed concerns about money laundering and said it would keep an eye on any suspicious activities.