PBOC Deadline Day: Business as Usual for BTC China

BTC China's banking partners have not issued any instructions to halt deposits, says CEO Bobby Lee.

Apr 15, 2014 at 12:41 p.m. UTC
Updated Sep 11, 2021 at 10:39 a.m. UTC

The rumored deadline for China's banks to cut off bitcoin exchanges from deposits has arrived, with no official word from the authorities that such a policy even exists. Chinese exchange BTC China claims it has no intention of changing the way it does business.

The story has contributed to turbulence in the bitcoin markets since it first began circulating as a rumor last month. Bitcoin saw its value fall beneath $400 briefly for the first time since November 2013. This is despite the People's Bank of China (PBOC) itself insisting it had no intention to ban digital currencies.

Some exchanges have received formal and verbal notices from their banking partners, and there have been reports Chinese companies are looking to move some of their operations offshore.

No notice

, CEO of BTC China, says his exchange has not heard of any changes, either from the central bank or any of the many banks with which it does business.

Business at BTC China will proceed as usual after this week, with customers replenishing their accounts via bank deposits or the 'voucher' system the exchange introduced in response to the first banking scare in December last year.

BTC China's banking partners have reported seeing rumors of a new policy in the media, he said, but that was all.

"Our situation hasn't changed. We've been talking to banks, the ones we have personal relationships with, and so far we've not received any notice to close our business with them."

Lee said that all customer funds remained on hand and, even if one of BTC China's banks decided to end its relationship with the company, it would simply move the funds to another account.

Rumors vs reality

There are three important points to remember in this series of events: firstly, despite some stating otherwise, China has not 'banned bitcoin'.

Secondly, any leaked opinions so far referred to funding bitcoin exchange accounts through bank deposits. Bank accounts were never in danger of being frozen, and the ability to withdraw funds from exchanges to bank accounts was not in question. Chinese exchanges also work with multiple banks at a time, with the ability to transfer funds between them.

Thirdly, and most significantly, all reports from China concerning banks and bitcoin exchanges so far are unofficial. To date there has been no ruling or policy statement by the People's Bank of China on the matter, and any actions taken by Chinese banks were precautionary only.

"We're still fully holding all customer assets, I want to emphasize that," Lee continued.

"There's nothing missing, there's no misappropriation or frozen funds. All our funds are liquid and fully accessible. We don't invest any of our funds in special 'wealth management products', or anything like that. Everything is liquid funds."

Unspoken rules

The current Chinese attitude might be called a 'tacit policy', in which the government makes no official statements but makes its intentions known via subtle leaks to the media and asides to contacts in the banking industry. Authorities may well disapprove of bitcoin and discuss it with their associates, without the need for any proclamation.

Bitcoin operates in similar environments in other large economies, including the US, where regulatory authorities seem at times permissive towards digital currency innovation and at others less tolerant, depending on the department in question.

Under the status quo, bitcoin service businesses must register as 'money transmitters' in 48 states while the IRS rules bitcoin is property, not money, for taxation purposes.

Voucher funding

BTC China's voucher system, which it pioneered and other Chinese exchanges have used as well, is similar to buying a gift card or prepaid card for iTunes, Google Play or Amazon.

The main difference is the cards can also be used to withdraw funds, and then re-sold for cash to other users to fund accounts. BTC China sells the vouchers directly to resellers, who also sell them online.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.


Musk Sets New Condition for Twitter, Citi Says Terra’s Fallout Unlikely to Hit Wider Financial System

The most valuable crypto stories for Tuesday, May 17, 2022.

The most valuable crypto stories for Tuesday, May 17, 2022.

Market Wrap: Cryptos and Stocks Mixed Amid Bearish Sentiment

BTC is stabilizing around $30K while stock market volatility begins to fade.

BTC is stabilizing around $30K while stock market volatility begins to fade.

New Data Shows Underground Bitcoin Mining Thriving in China

The U.S. has also expanded its lead in the global hashrate competition.

The U.S. has also expanded its lead in the global hashrate competition.

Bitcoin sube a $30K, con una resistencia en $35K

BTC está en camino de registrar una señal de impulso positivo en el gráfico diario.

BTC está en camino de registrar una señal de impulso positivo en el gráfico diario.