Chinese government restrictions failing to curb Bitcoin use

 
Billy Ehrenberg
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80 per cent of bitcoin volume is driven by the Chinese yuan (Source: Getty)

China is going mad for Bitcoin, according to a new report by Goldman Sachs. Despite the government's measures to restrict use of the currency 80 per cent of Bitcoin volume is now driven by the Chinese Yuan. The next biggest driver of transactions is the US dollar, followed by the Euro.

The bank isn’t alone in its conclusions: Bitcoinity, a website that tracks bitcoin against other currencies, arrived at a figure of 77 per cent compared to 19 per cent for the US dollar and one per cent for the Euro.

Is China happy about its prestigious position? Not a bit of it. The People’s Bank of China (PBC), the country’s central bank, has worked hard to clamp down on Bitcoin, banning financial institutions from trading in the cryptocurrency and making sure Bitcoin companies can’t get access to payment processors. The PBC’s line is essentially that the currency is a conduit for speculation.

What's more, Goldman doesn’t see the market slowing anytime soon. China is an epicentre of Bitcoin mining, a process which involves computers solving complex maths equations for which they are rewarded in Bitcoins.

The report said

One prominent figure in Beijing's Bitcoin circles estimated that China's miners, composed mainly of hardware engineers and IT aficionados, number in the tens of thousands.

With the capacity for cheap and fast transactions that Bitcoin offers, and its already strong foothold in the country, the cryptocurrency won't be going anywhere soon.

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