BTCChina, China’s biggest Bitcoin exchange, has stopped accepting deposits in Chinese yuan. According to the company, the People’s Bank of China has spoken to a number of payment processors in China asking them to stop trading with Bitcoin exchanges by January 1, 2014. The BTCChina website posted the following note yesterday:
“Dear BTC China users: due to reasons we all understand, Bitcoin China (BTC China) had to temporarily stop the yuan deposit feature while bitcoin deposits, and bitcoins withdrawals to cash and RMB are still available on our home page. We will provide other ways to recharge as soon as possible. This is an inconvenience to you and we express deep regret at BTC China.” [translated]
Following this action, the bitcoin price plummeted. According to the South China Morning Post, yesterday the price of one bitcoin was 2,560 yuan (£258, $421). It was only 3 weeks ago that the value of a bitcoin hit 7,588 yuan (£764, $1,250) following comments from a US Senate committee hearing where virtual currencies where described as a “legitimate financial service” – see article Bitcoin virtual currency breaks $1,000 mark.
It is reported that a lot of interest in the Bitcoin currency has been generated recently by China’s interest in the virtual currency, causing its value to increase. The impact of the change in China’s regulations appear to have caused some to panic sell their bitcoins, causing the drop in its value both in China and elsewhere according to reports from Bitcoin exchanges in other countries.