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Bitcoin, the primary cryptocurrency or digital currency, has been publicly traded in China only as a form of investment, but is not allowed to circulate as a legal currency by Chinese banking regulators.
China’s commercial banks and other financial service institutes are also forbidden to provide Bitcoin-related services or price any products with it.
However, some other countries are moving faster forward in legalizing Bitcoin.
Wealthy clients of Swiss private bank Falcon can now store and trade bitcoins via their cash holdings with the bank. The service was approved on Wednesday, marking the digital currency’s breaking into the asset management sector.
Falcon said the new offering was part of its strategic re-positioning. The Zurich-based bank also said its product has regulatory approval from Swiss financial regulators.
India and Russia, among others, are going in the same direction.
The demand for cryptocurrencies is rising in India. The Indian government has indicated that it may legalize virtual currencies like Bitcoin and has set up a committee to look into Bitcoins' trading.
Japanese cabinet also approved the "Payment Service Amendment Act," which took effect in April. Twenty-six stores began accepting Bitcoin payments after.
Japan is the world's largest Bitcoin trading market in the world and has issued a dozen of licenses to exchanges and Internet companies for initial coin offerings.
Legalization comes with headwinds
The rise of Bitcoin comes amid headwinds of different views of governments, mainly because of lack of clear laws and regulations.
The Financial Crimes Enforcement Network at the US Treasury Department views it as a virtual currency that is a gift to money launderers.
Additionally, the Securities and Exchange Commission in the US rejected two different exchange traded funds that are based on Bitcoin earlier in the year, claiming that Bitcoin markets are largely unregulated and thus subject to fraud and manipulation.
However, experts believed that at the moment, "cryptocurrencies are only popular as a speculative instrument and a new trend. When it will be possible to pay your taxes with cryptocurrencies, or the government works out how to do it, then it will become a full-fledged currency."