Bitcoin dealt huge blow in China as two national banks and Tenpay ban cryptocurrencies

Bitcoin dealt huge blow in China as two national banks and Tenpay ban cryptocurrencies
Credit: Shutter

China looks like it is finally dropping the hammer on Bitcoin after the Bank of China, China Construction Bank and top online payments company Tenpay released statements banning the withdrawal, sale or purchase of the virtual currency by their customers.

The three statements — The Bank of China, China Construction Bank, and Tenpay (a PayPal-like service owned by Internet giant Tencent) — are the same. They are identical to statements made by other businesses of late, but on this occasion these three organizations are large, national entities, which makes their moves more impactful than other bans to date.

A rough English translation of the statement is below:

To protect the property rights and interests of the public and prevent money laundering risks, from now on, our customers — organizations and individuals — are forbidden from the recharge and withdrawals, purchase and sale of bitcoins, virtual currency and other trading funds using their account. Any customers found to have broken this rule may have their accounts closed.

Earlier this week, Bitcoin lost around 10 percent of its valuation after BTC China stopped doing business in China’s yuan currency with China’s Merchant bank. The market is still to react to the latest development, but as word gets out and the US business day comes around, it seems certain that we’ll see a price drop.

There has always been a large measure of uncertainty around Bitcoin in China. The price of Bitcoin tumbled when BTC China ceased taking local deposits in December — it was the world’s largest Bitcoin exchange at the time. That move came in response to a Bank of China warning that Bitcoin is not recognized as a legal currency in the country.

The latest revelations will affect the short time term but, in the long run, if Bitcoin wants to be a stable currency then it may arguably be better without the threat of Chinese regulation hanging over it. The big question is whether other countries will take as strong a position on it as China.

The current price of Bitcoin is $439.06, down from a day-time high of $448.63, according to CoinDesk. We’ll keep you posted with major changes as they happen.

We reached out to BTC China, which confirmed that it has seen the notifications but has received no official contact. Other Chinese Bitcoin exchanges that we contacted are yet to respond.

Related: How cryptocurrencies can curb unsustainable growth in government power

Headline image via Dora Tang / Shutterstock

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