Chinese Regulators in another Fresh Crackdown on Bitcoin

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Chinese Regulators in another Fresh Crackdown on BitcoinJust when the bitcoin exchanges are emerging from last week’s regulatory onslaught, China’s bitcoin exchanges have had the final nail hit on their coffin after the central bank directed the nation’s commercial banks and payment services providers to shut down trading accounts in two weeks, a person who is privy to the matter told Wall Street Journal.

The move, if it true, would eliminate the remaining route through which users can purchase the digital currency. 

Global Bitcoin prices have plunged about 8 percent since Caixin, a local financial publication, reported the news. The rules have affected several bitcoin platforms, though the exchanges say that business is still as usual as they are yet to receive any notices from their bankers.

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 “This would be a bad thing for the exchanges. But it is certainly within the realm of what the government is allowed to do. We are taking things one day at a time,” Bobby Lee, chief executive of BTC China told Financial Times.

In China, Bitcoin’s price has plunged 17 percent to 2,950 yuan ($475) since the recent regulatory report. It has also declined about 60 percent from its high in November, just before China’s regulators rolled out the first measures to tame the rapid growth of digital currency in the country.

In December, Beijing stated that individuals were permitted to acquire and sell Bitcoin at their own will and risk. However, after it classified it as an online product instead of a currency, the regulators banned all the country’s commercial banks and financial intermediaries from handling any Bitcoin transactions.

The country’s Bitcoin exchanges then circled around the government regulations by allowing users to deposit money directly into their corporate accounts, something that ensured Bitcoin trade continued. However, the new laws are threatening to put an end to this by ensuring Bitcoin exchanges will be prevented from having any bank accounts.

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