China Bitcoin Exchange Restores Deposit Facility

BTC-China31 Jan 2014 / Wall Street Journal – Popular Chinese bitcoin exchange BTC China has restored a facility allowing customers to purchase bitcoin by depositing yuan into the exchange’s corporate bank account.

The move reverses a decision in December to halt such deposits, which the exchange made in response to a Dec. 5 memo from the People’s Bank of China warning national financial institutions not to trade in bitcoin. Those twin developments threatened to curtail volumes on BTC China, which had grown to become the biggest exchange in the world, and prompted a more than 50% drop in bitcoin’s international price over a two-week period in December.

At the time, some of bitcoin’s harshest critics even described them as the death knell for the digital currency.

Reached by phone in Shanghai, BTC China Chief Executive Bobby Lee said the change, which was implemented Thursday, was made after the company studied the PBOC memo and other rules that raised concerns about BTC’s banking activities. The exchange determined that it was legally permitted to accept deposits into its corporate bank account and to transfer those funds into customer accounts, even though banks themselves are barred from engaging in bitcoin businesses and speculation.

BTC China isn’t making a high-profile announcement about the change, however, in part because it is taking a cautious view of future government actions. “We are definitely in compliance with the Dec. 5 memo, but the government and the government agencies can change the rules anytime in the future,” Mr. Lee said. “So we are going to take a wait-and-see approach.”….. Read more

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