Post by niseag on Apr 2, 2014 21:53:25 GMT 4
The latest move by the People's Bank of China is a huge blow to the country's bitcoin exchanges, which have found their footing in the more than three months since Chinese authorities appeared to take measures clamping down on the industry. In December, the PBOC ordered financial institutions to stop dealing with bitcoin. Later that month, it made clear that third-party payment processors could not help exchanges collect money from users.
The earlier moves left Chinese bitcoin exchanges with the ability to take direct deposits into corporate bank accounts. In the subsequent months, trading volumes and prices rebounded, as investor confidence returned, in part due to relief that the government had not ruled out bitcoin completely. Some in the bitcoin community said it was actually a positive that the government had said people are free to buy bitcoin.
Making it clear that domestic banks cannot provide clearing, account opening and other services for bitcoin exchanges, however, leaves exchanges with significantly less room to maneuver.
"There will definitely be a negative impact to the exchanges," said Bobby Lee, chief executive of Shanghai-based BTC China, the most prominent Chinese exchange name abroad, having risen to briefly be the global leader by trading volume late last year. The latest move is a "stricter interpretation of the written rules" from the December statement, he added.
The earlier moves left Chinese bitcoin exchanges with the ability to take direct deposits into corporate bank accounts. In the subsequent months, trading volumes and prices rebounded, as investor confidence returned, in part due to relief that the government had not ruled out bitcoin completely. Some in the bitcoin community said it was actually a positive that the government had said people are free to buy bitcoin.
Making it clear that domestic banks cannot provide clearing, account opening and other services for bitcoin exchanges, however, leaves exchanges with significantly less room to maneuver.
"There will definitely be a negative impact to the exchanges," said Bobby Lee, chief executive of Shanghai-based BTC China, the most prominent Chinese exchange name abroad, having risen to briefly be the global leader by trading volume late last year. The latest move is a "stricter interpretation of the written rules" from the December statement, he added.
