Bitcoin Plummets in China Amid Ban

Central bank: It's not a real currency

By Matt Cantor,  Newser Staff

Posted Dec 18, 2013 10:37 AM CST

(Newser) – On Monday, China's central bank told top Chinese payment-processing firms they could no longer deal in digital currencies; two days later, the country's top Bitcoin exchange, BTC China, has now had to stop taking deposits in China's currency, the renminbi. Now, the value of bitcoin in the country—one of the biggest markets for the digital currency—has plummeted, the New York Times reports. As of this evening in China, BTC put Bitcoin's value at some $380 each, or 2,300 renminbi, down 40% from yesterday.

The figure is also less than half of Bitcoin's peak value of 7,395 renminbi, hit Dec. 1. The People's Bank of China, along with four other official finance and tech agencies, declared a ban on Bitcoin deals on Dec. 5, in order to "safeguard the interests and property rights of the public, protect the legal standing of the renminbi, take precautions against the risk of money laundering, and maintain financial stability." The central bank says Bitcoin isn't a currency. "It is not issued by a central monetary authority, it does not have the properties of legal currency, and it is not a currency in the real meaning of the word." Meanwhile, in North America, Bitcoin is involved in some big purchases.

In this April 3, 2013 file photo, a man rolls a stack of bitcoin tokens at his shop in Sandy, Utah.
In this April 3, 2013 file photo, a man rolls a stack of bitcoin tokens at his shop in Sandy, Utah.   (AP Photo/Rick Bowmer)
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