News / Economy

Bitcoin Crashes in Wake of Chinese Restrictions

A pile of bitcoin tokens - a retro-futuristic kind of prepaid currency that made its debut four years ago - are shown, April 2013.
A pile of bitcoin tokens - a retro-futuristic kind of prepaid currency that made its debut four years ago - are shown, April 2013.

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VOA News
The meteoric rise of the controversial virtual currency Bitcoin appears to be over, at least for now.

China, where wild speculation had sent the price of Bitcoin skyrocketing, announced today that it was no longer accepting yuan deposits for the cybercurrency.

The announcement sent the price of Bitcoins tumbling after the midday announcement, sinking as low as 2,503 yuan ($412) by early evening after starting the day at 3,755 yuan ($618). Less than a month ago, the currency sold for as high as $1,250.

BTC, the world’s largest Bitcoin exchange, made the announcement on its Weibo account, saying "due to the reasons that everyone knows, BTC China has to temporarily stop its yuan account recharging functions."

BTC said Bitcoin holders can still top up their accounts using Bitcoins and withdraw yuan.

"We essentially got notice from our third-party provider today that they will discontinue accepting payments for us and new deposits," said Bobby Lee, chief executive of BTC China, according to the South China Morning Post. "We're still operating a Bitcoin exchange in China legally, and we're still allowing people to deposit and withdraw Bitcoin, and withdraw renminbi [yuan]."

The clampdown comes in the wake of fears among Chinese officials that the cybercurrency, which is anonymous and operates independently of any bank or government, could become a viable alternative to the yuan, which is not freely convertible. Bitcoin potentially could have offered an untraceable and anonymous way for Chinese to move their money offshore.

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