A store that accepts bitcoin payments in South Korea. (Photo/CFP)
Bitcoin transactions have slowed since the People's Bank of China, the nation's central bank, cut its payment channels, and bitcoin trading platforms will have to find ways to skirt around the ban, reports Shanghai's China Business News.
The central bank convened more than 10 third-party payment companies on Dec. 16, demanding them not to offer custodian and trading services to bitcoin, and other similar products such as litecoin. The move dealt a severe blow to the global digital currency, which saw its prices plunge more than 40% following the announcement.
Some third-party payment firms had continued to reach agreements with bitcoin trading platforms despite the central bank's attempts to curb bitcoin transactions. However, following the Dec. 16 meeting, all third-party payment firms dare not oppose the central bank's decision, the paper said.
The third-party payment channel is fully cut, impossible to resume, but our transaction platform has to move on, said an unnamed chief executive of a bitcoin trading platform.
Over the past year, believers of the global digital currency have tried all they can to create a legendary result with rocketing price surgeS. However, Bitcoin prices plunged more than 40% just two days after the central bank move, falling as low as to 2,400 yuan (US$400) on Dec. 18 — down from 4,000 yuan (US$660) on China's main bitcoin transaction platforms, according to Tencent's financial news portal finance.qq.com.
Prices on BTC China, the first bitcoin trading platform in China, currently stand at 4,270 yuan (US$700), the paper said.
Huobi, another online trading platform, said it now accepts bank remittances for both individual and corporate accounts for bitcoin transactions, although the firm recommends using corporate accounts as individual accounts represented only about 2% of the total, said Huobi co-founder Du Jun. As the practice of bank remittances needs to be handled by more human power, Huobi has increased its client-service team to more than 30 employees from a previous 20, Du said.
Meanwhile, BTC Trade has returned to bank remittances for transactions, the old way before the third-party payment services were available, said BTC Trade founder and CEO Zhang Shousong.
Some trading platforms are using cash for transactions demanded by certain investors, but one unnamed trading platform has yet to decide whether to accept such cash transactions in a large volume. Bitcoin investor Jin Jing (pseudonym) said that some experienced individual investors have also begun to act as trading agents for others, charging them service fees of 0.5%-1% for Bitcoin transactions.
Huobi, which has adopted free transaction fees, has emerged as China's largest Bitcoin trading platform in China since the central bank move, replacing previous leader BTC China. Daily transactions on Huobi reach as high as 40,000-50,000 bitcoin units, but is still slower than the trading of 100,000 units before Dec. 16, the paper said.
