News / Economy

Alibaba Division Bans Bitcoin Trading After China Crackdown as IPO Looms

FILE - Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah.
FILE - Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah.
Reuters
— China's biggest online marketplace, Alibaba's Taobao, will ban the sale of bitcoins on the heels of a government crackdown against the virtual currency aimed at plugging a potential gap in the country’s tight controls on capital flows.
 
The move comes as Alibaba, China's biggest e-commerce company, seeks the smoothest of rides toward a giant initial public offering (IPO) of stock expected later this year. In a statement posted on its website late on Tuesday, Taobao said the ban is effective from January 14.
 
Taobao's move to fall in line with the government's wishes also comes as Alibaba presses on with efforts to stamp out the sale of fake goods on the online marketplace ahead of the IPO. Alibaba has been conservatively estimated to be worth over $100 billion.
 
“The central bank clearly has required third-party payment services to close bitcoin... trading channels,” Taobao said in its statement, without disclosing any details on bitcoin sales through its platform up to now. Backed by neither a government nor a bank, bitcoin has attracted currency speculators in recent months.
 
Alibaba spokeswoman Florence Shih stated, “in the interest of consumer protection, Taobao has banned the sale of bitcoins on the platform.”
 
Taobao uses Alibaba's online payment affiliate Alipay to process transactions across the world's second-biggest economy, handling over 1 trillion yuan ($165 billion) in annual sales volume together with its sister shopping portal, T-Mall.
 
The Taobao ban, which covers other virtual currencies, also includes the sale of any guides, computer hardware or software related to bitcoin “mining.” In the mining process users can mint new bitcoins of their own by having a computer solve complex mathematical problems.
 
Most bitcoin sales take place on specialized electronic platforms, rather than online marketplaces like Taobao, that are designed to trade the virtual currency for various physical currencies.
 
In December, the People's Bank of China (PBOC) banned financial institutions from trading in bitcoins, saying the government would act to prevent money laundering risks from bitcoin, which is not backed by a government or central bank. It did not ban individual trading.
 
Later the same month, the Chinese Business News reported that the government had asked third-party payment services to stop handling bitcoin transactions, forcing Shanghai-based BTC China, the world's largest bitcoin exchange platform by volume, to stop taking Chinese yuan deposits.
 
“I think it's overreaching,” said Bobby Lee, Chief Executive Officer of BTC China, referring to Taobao's ban on bitcoin-related accessories. “I think they're trying to just win favors from the government.”
 
The PBOC stance reflects the fact that the bitcoin trade represents a potential hole in the country's capital controls. They are minted anonymously, are untraceable, and can be carried on memory sticks or transmitted electronically.
 
However, analysts say that given the total value of bitcoins in circulation remains tiny relative to other currencies, the trade is unlikely to have much impact on the wider economy for now.
 
The price of bitcoins on BTC China fell 15 percent on Tuesday to 4718.51 yuan, but had bounced back 4.5 percent by late afternoon on Wednesday.

You May Like

China Investigates Former Powerful Security Chief

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, under investigation for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.