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Payment providers stop Bitcoin services

By Yang Jing Source:Global Times Published: 2013-12-17 23:08:01

Two major online third-party payment providers confirmed with the Global Times Tuesday that they have stopped providing payment service for trading websites of Bitcoin and Litecoin, in line with an order from the central bank.

The People's Bank of China has met with several third-party payment companies, banning them from providing payment services to Bitcoin trading, media reports said Tuesday.

An expert noted that this indicates a strengthening of measures by the PBC after its previous notice about Bitcoin not being a fiat currency released on December 5.

The PBC requires third-party payment services to stop providing payment service for trading websites of Bitcoin and Litecoin, which are both virtual currencies, Shanghai-based newspaper China Business News reported Tuesday.

Both Alipay and Tenpay, owned by Alibaba Group and Tencent Holdings separately, confirmed the news when contacted by the Global Times Tuesday.

Alipay did not cooperate with any Bitcoin trading websites and will not do that in the future, a PR staff member of Alipay, who prefers to remain anonymous, told the Global Times Tuesday.

As the PBC requested, Tenpay will not provide payment service for Bitcoin trading, an anonymous PR staff member of Tencent told the Global Times Tuesday.

Previously, Tenpay had been providing payment service for Chinese Bitcoin trading websites btcchina.com and okcoin.com, but now these websites have replaced Tenpay with another payment tool, the report said.

At the meeting held Monday, in addition to banning payment services for Bitcoin trading, the PBC also required the payment companies to terminate any current cooperation on Bitcoin trading, said the report.

In addition to banning Chinese payment services from Bitcoin trading, the PBC may release regulations on foreign payment tools operating Bitcoin trading in China, the report said.

The ban by the PBC did not come as a surprise to Li Chao, an analyst at Beijing-based consultancy iResearch, who noted that it is a detailed measure by the PBC following its December 5 notice about Bitcoin.

In this previous notice, the PBC said Bitcoin does not have equal legal status as fiat currencies, and it cannot and should not be circulated in the market as a fiat currency.

In the notice, the PBC also banned all financial and payment institutions from establishing Bitcoin services due to high risks.

But it will not bring much influence on Bitcoin trading, Li said.

Bitcoin has its own trading channels, which operates on the global stage, so the banning only sets up a barrier between Bitcoin and renminbi, according to Li.

The price of each Bitcoin was 3,970 yuan ($653.86) by press time, dropping about 14 percent from the closing price of Monday, according to btcchina.com, a major trading platform for the virtual coin.

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