BTC China, one the world’s largest Bitcoin exchanges by volume, is halting user deposits originating from China Merchants Bank. The bank had posted on its website that customers will no longer be allowed to perform bitcoin-related transactions.
The exchange said that the action aims to help secure client funds and ensure stable operations. Technically, there is nothing officially preventing the exchange from accepting such deposits should they somehow make their way through, and it appears the exchange does not depend on China Merchants Bank as a partner institution. Perhaps they want to pre-empt sudden shocks to operations and help customers channel funds through other avenues before encountering difficulties through the routes they’re more used to.
Or perhaps they are trying to keep a step ahead. In what’s shaping up to a game of cat and mouse, Bitcoin businesses are not contacted directly by the People’s Bank of China (PBOC). Thus, they occasionally get wind of an impending edict days in advance and plan their next move accordingly, all while reporting during the interim that they’ve heard nothing from their bank. In acting proactively, the exchange’s CEO Bobby Lee said, “We saw the bank’s statement and we took the initiative.”
It appears that the move will have “basically no impact” on operations, as accounts from other financial institutions can still be used.
Introducing NextV - The Full Scope Solution To Building Your Next Virtual EventGo to article >>
The move comes right after the PBOC reportedly held closed-door meetings with financial institutions last week to reiterate their stance on ending relationships with Bitcoin-related businesses. The latest crackdown appears to be sweeping up payment processors as well. Alipay, China’s equivalent of PayPal, said it is stopping any payment related to cryptocurrency:
“From today onwards, no individual nor entity may use any kind of our company’s payment services for bitcoin, litecoin etc.”
The latest round of unsettling news has unnerved bitcoin traders this weekend, sending prices back toward the mid $400’s, a level originally reached when rumors of the latest China bans first emerged. One week ago, Bitcoin had recovered back to well over $500 as the Chinese front quieted and it started to appear that exchanges have adequate workarounds in place.