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April 3, 2014updated 04 Apr 2017 4:07pm

PBOC orders shutdown of Bitcoin trading accounts

The People's Bank of China (PBOC) has ordered Chinese payment companies and commercial banks to shut down Bitcoin trading accounts by 15 April.

By Verdict Staff

The People’s Bank of China (PBOC) has ordered Chinese payment companies and commercial banks to shut down Bitcoin trading accounts by 15 April.

The rules are a further consolidation of regulations China’s central bank put in place in 2013 upon the crypto-currency.

Bitcoin prices are down approximately 8% since the new rules were first reported affecting more than a dozen Bitcoin exchanges.

Chinese authorities perceive that Bitcoin possesses a potential threat to financial stability and attract speculative retail investors.

Regulators are also concerned about the safety of Bitcoin exchanges following the collapse of Japan’s Mt. Gox exchange after the majority of Bitcoins it was holding were stolen.

In December 2013, the PBOC ordered financial institutions to stop dealing with Bitcoin. Later that month, it made clear third-party payment processors could not assist exchanges collect money from users.

A source familiar to the latest directive has said the PBOC does not intend to ban Bitcoin trading in China, but to enforce what was already stated in the December document.

The document inferred that Bitcoin is not a currency with "real meaning" and does not have the same legal status as a currency.

The document said that the public, however, is free to buy and sell Bitcoin online provided that they accept the risk.

 

Related to:

PBOC may amend proposed caps on mobile payments

China’s Vircurex freezes all customer accounts

Bitcoin prices fall as leaked document reveals MtGox on verge of bankruptcy

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