Wednesday, April 2, 2014

China Orders Big Banks to Close Bitcoin Trading Accounts

China's central bank has ordered the country's commercial banks and payment companies to close bitcoin trading accounts in two weeks, according to people with knowledge of the matter, dealing another blow to the virtual currency, reports WSJ.

More from WSJ:
The latest move by the People's Bank of China is a huge blow to the country's bitcoin exchanges, which have found their footing in the more than three months since Chinese authorities appeared to take measures clamping down on the industry. In December, the PBOC ordered financial institutions to stop dealing with bitcoin. Later that month, it made clear that third-party payment processors could not help exchanges collect money from users.

The earlier moves left Chinese bitcoin exchanges with the ability to take direct deposits into corporate bank accounts. In the subsequent months, trading volumes and prices rebounded, as investor confidence returned, in part due to relief that the government had not ruled out bitcoin completely. Some in the bitcoin community said it was actually a positive that the government had said people are free to buy bitcoin.

Making it clear that domestic banks cannot provide clearing, account opening and other services for bitcoin exchanges, however, leaves exchanges with significantly less room to maneuver.

"There will definitely be a negative impact to the exchanges," said Bobby Lee, chief executive of Shanghai-based BTC China, the most prominent Chinese exchange name abroad, having risen to briefly be the global leader by trading volume late last year. The latest move is a "stricter interpretation of the written rules" from the December statement, he added.


  1. "It's just a flesh wound!"-The Black Knight

    1. The banksters have also suffered a flesh wound. Billions of dollars have leaked out of fiat into Bitcoin - and it will continue.

    2. Go ask Mt Gox 'investors' how that worked for them. Are the Feds tracking down the thieves?

  2. Bitcoin was created to be "person to person" so this is something the creators of Bitcoin expected. I'm just surprised it took so long for Big Brother to crack down. We, the Bitcoin users, have had a nice, free ride on the banking system's rails which has helped us get it into the hands of a lot of people. Regardless, Bitcoin is here to stay. All the regulators can do is slow it down but they cannot stop it.

  3. Bob, in all fairness, where's your articles reporting that Stripe and Square are now integrating Bitcoin? Or how about the fact that VC's have committed 100 million toward Bitcoin related projects over the next several years?

  4. Putin Plays A Golden Card

    So, in light of this, what did Vlad do next? He has allowed Bank Roosiya to issue bank notes that are fully convertible into any foreign currency, including gold.

    From the Tass link of Sunday, note this section:

    "The Golden Symbol of Russian Rouble installation in front of the bank’s office in Perevedensky pereulok in Moscow will symbolize the rouble’s stability and its backing by the country’s gold reserves, the action’s organizers explained to Itar-Tass."

    And then note that the article continues:

    "The bank Rossiya’s decision to give up foreign currency and start working exclusively with the Russian rouble is a step forward towards converting the Russian economy and banking sector to national currency, Andrei Kostin, the VTB bank president, said in an interview with the Russia 24 TV news channel commenting the decision of bank Rossiya to operate only in the domestic market and exclusively with the Russian rouble."