Bitcoin value slumps after China bank measures

Tags: Bitcoin, China, News
Bitcoins were trading today at less than half their value at the end of


last month after Chinese authorities took steps to rein in transactions in virtual currency, which had soared in recent months.

Prices on BTCChina, the country's biggest Bitcoin trading platform, stood at $504 each, down almost 60 percent from their high of 7,588 yuan in November.

Bitcoin, invented in the wake of the global financial crisis, is a form of cryptography-based e-money that offers a largely anonymous payment system.

Chinese speculators have poured money into it this year, driving the BTCChina price up 9,122 per cent from January 1 to November 30 and making the country at times the world's biggest Bitcoin market.

But two weeks ago China's central bank ordered financial institutions not to provide Bitcoin-related services and products and cautioned against its potential use in money-laundering.

On Monday, it banned domestic third-party payment companies from providing clearing services for virtual currency trading platforms, according to a report in the China Business News.

Citing an unnamed source, it said the instruction was issued at a closed-door meeting.

A notice posted today on BTCChina's website to its "valued customers" said: "Due to new government regulations, BTCChina will temporarily suspend CNY (yuan) deposits."

It added: "Rest assured that BTCChina will continue to operate normally. We deeply apologise for any inconvenience."

Both BTCChina and another major Chinese exchange, OKCoin, have resumed charging investors transaction fees, according to notices on their respective websites, which said the move was intended to prevent speculation and price manipulation.

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