Price of Bitcoin Plummets Amid Rumors of Possible Ban of Bitcoin in China
The price of bitcoin has taken a dive recently due to the rumors and uncertainty surrounding the Chinese government’s decision on regulating the digital currency harshly. The current trading price, at the time of this article, of the coin according to Bitstamp is $455.
Rumored reports have claimed that the Chinese government is seeking to make illegal for banks to work with digital currency exchanges. The reports which first appeared on March 27th, sources in China are claiming them to be true. The nation’s central bank authority, the People’s Bank of China, has still not made any official statements regarding the digital currencies as a whole or bitcoin in specific.
Possible Ban Rumors of Bitcoin in China
When the false news story broke out from Sina Weibo on March 21st, a microblogging site based in China, about bitcoin soon becoming banned in the country, the People’s Bank of China was quick to refute the false rumors. No news of this nature has come out from the PBOC about this new development. Even though the PBOC has warned other banks from dealing with bitcoin in the past, if this news story is proven true then it might mean a complete ban of the digital coin.
This rather sudden drop in price resulted from the report from Caixin, a news source based in China, about the possibility of a policy change regarding bitcoin in China. The People’s Bank of China has not released any official statements to refute the news article. Furthermore, Caixin has not pulled back the article.
The news story has claimed that the Chinese government will hold accountable any bank that deals with bitcoin exchanges after April 15th. Caixin is not the only news source to have reported this story but in fact it appeared on several news outlets. As an immediate result of the news, bitcoin dropped to below $550 on Chinese exchanges. The news report cited money laundering, illegal activities, price volatility and investor risk as reasons for the government to harshly regulate the digital currency.
Bitcoin in China: Bitcoin Exchanges Speak Out
Most bitcoin exchanges based in China have stated that they have not heard about this recent news development. They have tried to verify it with the People’s Banks of China but could not find any information from them. OkCoin’s CEO, Star Xu said “We didn’t get any official announcement.”
Bobby Lee, the CEO of BTCChina said that the news story seemed to be just false rumors but he is still on the lookout for any grounded updates. “We haven’t seen any concrete evidence of any of this yet,” Lee commented. If the current news story proved to true, then Lee explained “We will adjust our business model accordingly, and it’s too early to tell what all of the options are, and which directions we will proceed down.”
Bter, however, has suspended its Yuan deposits citing official Chinese regulation notice.
There is much uncertainty surrounding this development and no confirmation has yet been given by the main authority it is referencing, the People’s Bank of China.
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