PBOC Tells Banks to Close Bitcoin-related Accounts Once More

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PBOC Tells Banks to Close Bitcoin-related Accounts Once More
PBOC Tells Banks to Close Bitcoin-related Accounts Once More
PBOC Tells Banks to Close Bitcoin-related Accounts Once More

China’s central bank held meetings with senior executives of the major banks in the country, telling them to stop all bitcoin-related transactions as it moves to rein the popular digital currency.

The People’s Bank of China told the banks to establish special units to monitor accounts that may be used to carry out bitcoin-related dealings and warned that banks that failed to comply with the directive will be censured publicly, reported Wall Street Journal.

After earlier adopting a neutral stance last year, PBOC has started moving to contain the virtual currency over fears that it may be used for money laundering and evading the tight capital controls. It has also recently described the bitcoin as a “tool for speculation”. Bitcoin, unlike other conventional currencies, exists solely in digital format and isn’t controlled by any government or central bank.

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During the April 24th meeting, the central bank castigated several banks for not implementing its tougher regulations.

China was the world largest bitcoin market until PBOC’s crackdown scared away local users. This has seen the price of bitcoin plummet from $1,147.25 on December 4-just before PBOC announced its first restrictions against the currency- to $427.29 on Wednesday afternoon. Five state-controlled banks had allowed users to continue opening new bitcoin-linked accounts despite being told not to.

When contacted, the Agricultural Bank of China, the Industrial & Commercial Bank of China, China Construction Bank, Bank of Communications and Bank of China refused to comment on the issue.

However, bitcoin businesses in China have devised a way to skirt around the rules. A leading Chinese bitcoin exchange, BTC China, launched in April the country’s first bitcoin ATM in Shanghai. It also created an online app that allows users to buy and sell bitcoins. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

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