I used to be a vice president for a large investment bank based in Hong Kong, so I can provide a little better insight than most on what’s going on with.

The People’s Bank of China has basically given the green light for Bitcoin trading and exchanges.  They are trying to keep Bitcoin trading “separate” from the other parts of the financial system so that if Bitcoin blows up, then nothing bad will happen.  The thing that I think they are worried about is a Lehman Brothers-style situation in which something blowing up in derivatives brings down the rest of the economy.