Bitcoin is starting to gain legitimacy and traction in the marketplace in the United States, Canada and elsewhere, but in China it’s a completely different story. Soon after China issued bans on the cryptocurrency, the market reacted and scaled back their bitcoin operations, including Alibaba, the largest e-commerce business in the country.
The top Internet retailer has now confirmed that it will no longer allow bitcoin sales on its shopping platform due to the government’s regulatory clamp down on the digital currency. The regulation, which will be extended to other digital currencies like Litecoin, is scheduled to take effect on Jan. 14.
“In the interest of consumer protection, Taobao Marketplace has banned the listing or sale of Bitcoins over the platform,” said Florence Shih, an Alibaba spokeswoman, in an interview with the New York Times. John Spelich, a spokesperson for Alibaba, meanwhile, confirmed the policy to CNN and said that the purpose of the measure is to protect its customers.
Alibaba is presently valued at more than $150 billion and has been considering an initial public offering (IPO) in the U.S. this year. During the country’s largest shopping holiday, the Chinese company generated $5.75 billion sales in just one day, a number that is well above U.S. Cyber Monday sales of $1.75 billion.
Demand for bitcoin has been immense, but regulators have attempted to circumvent its usage by warning that it is not a currency. It has not prohibited its citizens from owning bitcoin, but its regulations have hurt its trading capabilities in Beijing. China’s stance is that bitcoins pose a threat to its financial structure.
Over in the U.S., lawmakers are discussing the possibility of imposing regulations – governments worldwide have debated the cryptocurrency as some say it should be treated like any other commodity, while others are against it completely. The Federal Reserve has already noted that it has no authority to regulate bitcoin and Ben Bernanke even confirmed in a letter to Congress that it “may hold long-term promise.”
Some libertarian investors are not convinced, such as Peter Schiff, who opined that bitcoin is in a bubble and can be likened to the tulipmania in the Netherlands.
“I have a lot of sympathy for what people are trying to achieve with bitcoin, it’s just not going to work,” Schiff told Yahoo’s Breakout. “People think that because bitcoin replicates all these properties that gold has therefore it can work as a modern day gold standard, but it doesn’t have any value on its own.”
At the time of this writing, bitcoin is currently trading at just over $830.