Financial analysts are welcoming the move. So is the CEO of a major Chinese Bitcoin exchange, BTC China, who told Bloomberg that he was "happy" to see Beijing take its first steps toward regulation.
In a statement, the People's Bank of China said that while Bitcoin doesn't currently pose a danger to the country's financial system, it is "highly concerned about Bitcoin trends."
It's not a little ironic that the announcement led to just the sort of volatility the bank was warning against.
Interest in Bitcoin has been surging in China. BTC China recently raised $5 million in venture funding as its trading volume swept past Mt. Gox and others. Even China Telecom is getting in on the craze. The state-owned wireless provider has launched a handset promotion in Jiangsu province that will allow customers to reserve a Samsung device for 0.1 bitcoins ahead of its Christmas release, and the carrier has also reportedly begun accepting bill payments in the virtual currency.