Bitcoin sells off on fears of Chinese crackdown

|By:, SA News Editor

Bitcoin (BITCN, BTCS) prices are down more than 8% following Chinese media reports stating China's central bank (the PBOC) has ordered state-owned banks to stop transacting with businesses that make use of the cryptocurrency. Coinbase is currently showing a bid-ask spread of $518.59-$522.26.

The reports haven't been independently confirmed. The CEO of local Bitcoin trading site BTC China says the order (if it exists) would prevent clients from depositing funds via their bank accounts. He adds the PBOC might not make a formal announcement, but simply enforce the ruling via direct channels with banks.

This month has already seen the PBOC take a harder line on online/mobile payment services, such as those offered by Internet giants Alibaba and Tencent. In December, the PBOC barred financial institutions from giving Bitcoin pricing, buying/selling the currency, and insuring Bitcoin-linked products. The move was seen as an attempt to more tightly regulate the yuan.