Caixin
Jan 07, 2017 04:46 PM
FINANCE

China Admonishes Bitcoin Exchanges as Yuan Slides

(Beijing) — China’s central bank has told several bitcoin exchanges to “clean up” and abide by laws and regulations after the value of the digital currency experienced a roller coaster ride earlier this week as investors sought to circumvent currency controls as the yuan slides.

The People’s Bank of China’s Beijing and Shanghai branches met with operators of three major bitcoin exchanges, noting that the “recent bitcoin price is highly volatile,” the branches said in two separate statements on Friday night.

Specifically, the PBOC’s Beijing office told Huobi and OKCoin not to mention the fact that the yuan is depreciating against the U.S. dollar when advertising their platforms, according to people familiar with the meeting.

The PBOC’s admonishment comes at a time when the yuan has fallen to its weakest level against the U.S. dollar in eight-and-a-half years, prompting investors to use the digital currency to circumvent the government’s efforts to prevent capital flight.

To get around the regulation, investors can purchase the digital currency onshore with the yuan and sell it overseas to get foreign currencies, Shenwan Hongyuan Securities Co. Ltd. said in a research paper earlier this week.

The Bitcoin price index complied by CoinDesk soared more than 50% since the beginning of December to its all-time high of $1,150 on Thursday before plunging to $836 as of the time of writing.

The PBOC statements also urged institutional and retail investors to “invest with rationale” in bitcoin and bear the possible risks on their own.

Contact reporter Chen Na (nachen@caixin.com)


You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code
GALLERY