Upon orders from the People’s Bank of China (PBOC), financial institutions are beginning to institute restrictions on client accounts to prevent them from taking part in transactions involving bitcoin and litecoin.
China Construction Bank confirmed Wednesday on its website that it will no longer allow its clients to use their accounts for transactions related to the two global decentralized peer-to-peer virtual currencies. This comes as Alipay and China Merchants Bank conducted similar measures.
Last month, the financial institution ended its support for OKCoin, a bitcoin exchange in China, which posted a statement on its website informing visitors that it could no longer offer prepaid charges due to the suspension of its payment channel.
China has reinstituted its fierce restrictions on virtual currencies, predominantly bitcoin. Late last month, the PBOC met with more than 20 commercial bank and third-party payment company executives requiring them to suspend bitcoin transactions and shut down accounts that performed bitcoin business.
We reported that the PBOC said that it would not impose a ban on bitcoins and other alternative currencies. However, industry experts say Beijing’s moves suggest otherwise and it could very well force bitcoin exchanges to move overseas.
Several Chinese bitcoin exchanges, including BTC China and Huobi.com, have signaled that the banks they did business with closed their accounts or on the verge of doing so.
The announcements caused the price of bitcoin to fall approximately 15 percent. At the time of this writing, bitcoin is trading at around $444.