Bitcoin value falls as China tightens curbs

Written by Reuters | Beijing | Updated: Dec 19 2013, 07:47am hrs
A Chinese bitcoin exchange platform announced on Wednesday that it had stopped taking Chinese yuan deposits, sending the price of the virtual currency down sharply as China broadened its crackdown on domestic bitcoin trading.

Shanghai-based BTC China, the worlds largest bitcoin exchange by volume, posted a notice about the new regulations on its website, two weeks after Beijing banned financial institutions from trading in bitcoin due to the risks involved.

Due to new government regulations, BTC China will temporarily suspend CNY deposits. BTC deposits/withdrawals and CNY withdrawals are not affected, and will continue to operate in the interim, the BTC China notice said.

It was not immediately clear whether other exchange platforms were affected.

The yuan-bitcoin exchange rate on BT China has dropped 46% from Monday, and 60% since a peak on December 1. The exchange rate on rival platform has fallen 70% from its November 30 peak.

Over the past two months, bitcoins have seen their value relative to the dollar skyrocket some 800% as speculators have piled into the currency, according to Bitcoin market operators say Chinese nationals are major participants in the market and hold an outsized share of the total number of bitcoins in circulation.