CHINA TOPIX

Updated 11:29 AM EDT, Tue, Jun 16, 2020

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China’s Central Bank Blocks Bitcoin Trade

The People's Bank of China (PBoC) has issued a new guideline to all banking and financial institutions to cease and desist from using and engaging in the trade of bitcoins.

Starting April 15, the PBoC ruling requires all banks and real and virtual payment systems to shut down all of the accounts opened by operators of websites trading in the virtual currency.

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The latest PBoC ruling serves as the final blow on bitcoin transactions in China using official banking and financial services. Fifteen trading websites were identified by the central bank to be covered by the order.

In 2013, the central bank and other national agencies prohibited various financial institutions from giving services to bitcoin related trading. Under the same circular, bitcoins are seen in China as a commodity and not a currency.

Both the 2013 circular and the latest order by PBoC do not restrict individuals from investing or trading bitcoins but warned that doing so will be at their own risk because it is not recognized as a legal tender.

Business analysts believe that despite the newest circular, trading sites in China will need to transfer their servers elsewhere and local investors will need to pay in cash in order to purchase and use bitcoins in transactions that are using bitcoins as a currency.

Bitcoins started in 2009 as a peer to peer payment system, a digital currency that uses cryptography to manage and operate the creation and transfer of money. 

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