Bitcoin Retreats to $418 on Regulatory Pressure

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Bitcoin Retreats to $418 on Regulatory Pressure

Prices of virtual currency bitcoin declined after exchange BTC China halted yuan deposits from the Bank of China, as regulatory authorities in the country looked to step up their onslaught on digital currencies.

“Dear users, Due to regulations, we have suspended CNY deposits from Bank of China,” the virtual currency exchange said in a tweet.

Later, bitcoin prices tumbled as low as $418.02 on Tuesday, after opening earlier at $429.72, Coindesk showed.

BTC China, China’s biggest bitcoin trading firm, had already stopped local currency deposits to accounts held at China Merchants Bank, International Business Times said.

On April 25 Merchant bank announced that it would no longer be possible for its customer to complete bitcoin transactions using accounts held at the bank, after the People’s Bank of China warned banks and third party payment providers not to facilitate trade in digital currencies.

BTC China accounts for more than 75% of bitcoin exchanges involving yuan. FXBTC comes second with a market share of 15%. Bter is the third-largest exchange, accounting for 8% of bitcoin trade in the local currency.

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According to Coinreport, the move by BTC China to halt yuan deposits may have been informed by the Chinese central bank’s rebuking of banks that work with bitcoin firms. Yet, it’s interesting to note that China has not outlawed bitcoin. But the PBOC has shown determination to halt bitcoin growth as a financial instrument.

Thus, restrictions at the moment have only touched on bitcoin-related businesses. The prohibitions may change in future, however.

So far this year, bitcoin prices have dropped about 44%, partly as a result of the threat of crackdown the PBOC poses, as Marketwatch reports.

Some smaller exchanges have ended up closing business altogether, such as FXBTC and Linkcoin. The exchanges attributed their shut down to the unfavorable regulatory environment created by the PBOC.

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

 

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.