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Bitcoin trading accounts banned in China: report

  • Staff Reporter
  • 2014-03-29
  • 17:22 (GMT+8)
The People's Bank of China in Beijing, March 20. (Photo/CNS)

The People's Bank of China in Beijing, March 20. (Photo/CNS)

The People's Bank of China, the nation's central bank, has ordered banks and third-party payment companies to close all bitcoin trading accounts at more than 15 exchanges across the country, the Shanghai-based China Business News reports.

The bank had recently issued a notice prohibiting domestic banks and third-party payment institutions from allowing bitcoin transactions, a source told the newspaper.

Accounts must be shut down by April 15, preventing investors in the currency from transferring funds, according to the source.

The measure was proposed during a meeting convened recently by the central bank to discuss ways to strengthen the prevention of risks involved in the peer-to-peer internet currency.

However, some industry insiders cast doubt on the feasibility of implementing such a ban.

Du Jun, co-founder of Huobi, China's busiest bitcoin exchange, told the newspaper that if companies' bank accounts were closed, then all records of transactions would go underground, which would make supervision more difficult.

Some industry insiders were of the view that some bitcoin exchanges had not received the notice yet.

"Our website runs normally and we have not yet received any notice," said Xu Mingxing, founding CEO of OKCoin, a bitcoin trading website.

The restrictions on the unregulated currency were the latest from the central bank, which has sought to limit dealings that might be used to launder money or evade capital controls. The central bank had issued a notice on Dec. 5, 2013 barring financial institutions and companies from receiving payments denominated in bitcoin, or making transactions with the currency or associated products.

The ban is a result of concerns that the digital currency might pose risks to China's capital controls and financial stability after a surge in trading in 2013 made the country the world's biggest trader of bitcoin, according to the paper.

The latest news had sent bitcoin prices down by nearly 10% to 3,300 yuan (US$532) as of March 27.

References:

Du Jun 杜均

Xu Mingxing 徐明星

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