One week after bitcoin price crash, still no official confirmation from People's Bank of China

Home » One week after bitcoin price crash, still no official confirmation from People's Bank of China
Photo source: http://www.flickr.com/photos/100239928@N08/

Photo source: http://www.flickr.com/photos/100239928@N08/

One week ago, a single report from China’s Caixin newspaper brought the value of bitcoin crashing down. On March 26, bitcoin had been trading in the $580 range, struggling to recover from both long-standing uncertainty in the wake of Mt.Gox, a potentially problematic IRS ruling and a previous, officially debunked rumor that bitcoin was to be banned in China in mid-April. The next day, when Caixin’s report was released, the price plummeted to $478.

All of this happened without a single word of confirmation from the People’s Bank of China, and without the closure of any bitcoin exchange bank accounts. All of China’s major exchanges have confirmed that their banks have not received any official directions to close bitcoin related accounts by the rumored April 15 deadline. Some third-party payment processors have received such direction, although this action has been public knowledge and officially confirmed since late last year.

Yet, over the last seven days, bitcoin’s price has continued to slide. At the time of this writing, the price has recovered slightly from the previous low of $437, hovering around $450. Several smaller Chinese exchanges — such as FXBTC, Bter and BTC38 — have halted trading in renminbi or are voluntarily suspected their bank transactions as a means of hedging their bets, but thus far no exchange or bank doing business with them has received any confirmation of the proposed account closures.

At least one major exchange, Huobi, claims that their bank has received no updates about bitcoin from the PBoC since the December announcement blocking third-party transactions. Other major exchanges like BTC China and OKCoin have been active wire transfer accounts at their banks allowing both deposits and withdrawals, which would seem to be in direct contradiction of the rumored “ban” which would have halted all deposits starting on April 1. (For a complete list of translated statements from these exchanges, click here.)

The real question in all of this is the People’s Bank of China’s reluctance to clear up the rumors or deny the seemingly false or highly inaccurate Caixin report. Some, such as BTC China CEO Bobby Lee, have suggested that such clarification is unlikely, and that current pressure on third-party payment providers is simply a “stricter interpretation of the written rules” from the December PBoC statement.

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