BTC China Halts Chinese RMB Deposits In Light Of Renewed PBOC Crackdown

Journalist:
April 26, 2014

Yesterday, Caixin reported that the PBOC, led by the Payment and Clearing Organization of China, has been having meetings and interviews with commercial banks, third party payment processors, and Bitcoin exchanges within China.  PBOC officials made it very clear that they wished to completely cut off the funding line of Chinese RMB into Bitcoin trading platforms around the country.  The renewed interest in Bitcoin by the PBOC has led to funding shuffles from every Chinese Bitcoin exchange.  Cryptocurrency exchange rates across the board have suffered since the first rumors of renewed the renewed PBOC crackdown when they surfaced in March.  The previous deadline for Chinese payment processors, including banks, to halt services for Chinese Bitcoin companies was supposed to be 4/15/14.  However, on that date, Chinese Bitcoin exchanges announced their future plans and the exchange rate soared, much to the embarrassment of the PBOC. In recent response, the PBOC stressed that vouchers, codes, and roundabout recharge methods still counted as providing services to Bitcoin trading platforms.  Now, it seems that Chinese Bitcoin exchanges will need to expedite their plans for webapps, ATMs, overseas accounts, and overseas websites.

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[dropcap size=small]B[/dropcap]TC China, the first Chinese Bitcoin Exchange to adapt to the original PBOC notice in December of 2013, has been using a code recharge system for Chinese Yuan (RMB) deposits for the last several months.  However, this morning they have announced an end to Chinese RMB deposits on their website, for now.  For other Chinese Bitcoin exchanges, the previous source of Chinese RMB recharges/deposits, recharge codes, have since dried up.  Searching on Chinese online marketplace Taobao for “bitcoin” will result in an error message as the PBOC specifically mentioned that online marketplaces providing these auctions were facilitating Bitcoin trade.

In March, Caixin reported on an internal memo sent from the PBOC to banks and third party payment processors within China titled: Notice on Further Strengthening Bitcoin Risk Prevention Measures.  The Notice prompted BTC China’s competitors to emulate BTC China’s funding model.  In the light of the recent strict crack down on Chinese banks providing accounts to Chinese Bitcoin exchanges, some Chinese Bitcoin exchanges are turning to more unconventional funding methods: such as ATMs.  The PBOC is now trying to ensure that all Chinese banks and third party payment processors cease any and all contact with Chinese Bitcoin exchanges.  It’s always worth mentioning that the Chinese government has not stated that bitcoin is banned for merchants or individuals to use.

BTC China #BitcoinAnnouncement

BTC China posted to their Weibo microblogging site early on 4/27/14, in China:

由于招商银行近日发出公告,比特币中国出于对用户资金安全及平台稳定运营的考虑,决定暂时停止招行账户的人民币充值。后续更新,敬请关注我们的官网和微博,再次感谢您对比特币中国的关心和支持 #比特币公告#

A translation is provided below:

Because of this morning’s announcement by the China Merchants Bank, BTC China, in the interest of its users and platforms security, has decided to suspend Chinese RMB recharges (deposits).  For subsequent updates, please follow our official website and Weibo account, thanks again for your patronage  and support of BTC China #BitcoinAnnouncement#

The Bitcoin community around the world is eager to see how Chinese Bitcoiners will respond to these most recent PBOC actions.  Some onlookers have hinted that Hong Kong, or other Special Economic Zones in China, might welcome Chinese Bitcoin exchanges.  Furthermore, that the Chinese government might turn a blind eye and allow them to thrive and innovate there, as has been a standard modus operandi for the last few decades for risky new industries.

Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.