Bitcoin Price Plummets as China’s Restrictions Gain Momentum

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Bitcoin Price Plummets as China’s Restrictions Gain Momentum

The price of bitcoin slipped 14% over the last two days as one of the leading virtual currency exchanges in the world announced that a ban by Chinese authorities had taken effect on transactions.

BTC China, which is one of the top five popular bitcoin exchanges, reported over the weekend that it had halted deposits in local currency yuan from the China Merchant Bank after the bank posted guidance on its site.

Chief Executive of BTC China Bobby Lee told CNBC that Merchant Bank called it on Monday, officially advising it to stop transactions from its account.

A Tweet appearing on the CNBC site reads: “Attn All: We have just received a formal notification from China Merchants Bank. We have stopped accepting customer deposits at this bank.”

Lee said that officials from the bank said the guidance was being conveyed from “their superiors in Beijing main office after a directive from the central bank.”

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The China BTC boss said transactions in accounts with other Chinese banks were unaffected. The often unstable price of the virtual currency was $424 by Monday morning, after dropping about 14% from its Friday price. CoinDesk showed bitcoin’s price to be around $434 later in the day.

The confirmation by BTC China extends existing anxiety over bitcoin regulation in China. It had been reported by local media that the People’s Bank of China (PBOC) had possibly set April 15 as a deadline for banks in China suspend all their bitcoin exchange accounts.

Digital currency exchanges BTC Trade and Huobi.com indicated earlier in the month that their bitcoin accounts had been frozen by their banks on or towards the deadline.

In March, reports carried by Chinese site Caixin indicated that China’s central bank intended to implement measures aimed at 15 bitcoin exchanges, warning of consequences for banks which had the exchanges as clients, if they didn’t cancel their accounts by the April deadline.

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To contact the reporter of this story; Deepak Tiwari at deepak@forexminute.com