May 11, 2014

Bitcoin is a form of cryptography-based e-money that can be stored either virtually or on a user's hard drive, and offers a largely anonymous payment system. Reuters pic, May 11, 2014. Some 200 virtual currency enthusiasts excitedly traded name cards and participated in panel discussions yesterday at China's first-ever Global Bitcoin Summit but several expressed shock that the event was given the green light in the first place.

Bitcoin is a form of cryptography-based e-money that can be stored either virtually or on a user's hard drive, and offers a largely anonymous payment system.

Speculators drove China's Bitcoin prices into the financial stratosphere last year, peaking at 7,588.88 yuan (now US$1,224 or RM4,000) in November, prompting the ruling Communist Party to take a series of steps that have triggered a tumble in the virtual currency and cast doubt on its future.

"I'm a little bit worried," Eric Gu, the co-founder of the Shanghai-based Bit Angels Club, told AFP on the sidelines of the gathering at Beijing's National Convention Centre.

"This morning, when I woke up, I was concerned, 'Will I be able to get into this summit at all?'"

This week, China's five largest Bitcoin exchanges abruptly declared they were pulling out of the Global Bitcoin Summit. The announcement followed an order from China's central bank to the country's top banks to crack down on activity related to the virtual currency.

At least 11 banks have ceased providing services related to Bitcoin, according to separate announcements, including China's "Big Four" -- ICBC, Bank of China, China Construction Bank and Agricultural Bank of China.

Despite government attempts to rein in the virtual currency and an order from Chinese authorities prohibiting domestic media from covering the event, the first day of the two-day summit was allowed to take place as planned yesterday.

Several attendees told AFP that they were cautiously optimistic about the future of Bitcoin, with some even voicing support for the Chinese government's stepped-up regulation of the currency, which is not backed by any government or central bank.

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