Another Slam For Bitcoin In China

By Sophie Song.

Not that you’d want to spend your bitcoins, when the virtual currency is trading at more than $1,000, but China is practically making sure you cannot – ecommerce giant Alibaba has banned bitcoin from its shopping websites.

This ban comes on the heels of two bans from the Chinese government, first preventing financial institutions from handling the virtual currency, and later preventing deposits made in yuan. Alibaba’s Taobao, an eBay-like platform connecting individual buyers to small-time merchants, has never accepted bitcoin payments itself, but previously allowed merchants to accept Bitcoin as payment. Some were even selling bitcoins and computer chips needed to mine for the virtual currency, the Financial Times reported on Wednesday.

But those transactions will no longer be allowed after Jan. 14. Alibaba has also banned all other virtual currencies along with bitcoin, as well as all related products including mining software.

Alibaba means to “promote the healthy development of Taobao Marketplace and to more effectively protect the interests of Taobao members,” a statement from the company, which also owns Tmall.com and Alibaba.com, said. The statement added that the decision stems from the Chinese central bank’s ruling in early December that prohibited financial institutions from handling bitcoins, the Financial Times reported.

At the beginning of 2013, bitcoins were trading for just $13. But virtually overnight, bitcoin’s fortune began to soar in China after a documentary airing on China’s state television brought the currency wider recognition, before falling hard on the series of regulations and bans in the nation. Even so, BTC China remains the world’s largest bitcoin trading platform by trading volumes, and along with Huobi, another platform, accounts for more than 60 percent of global transactions in bitcoins over the past seven days, according to Bitcoinity, a website that tracks Bitcoin usage.

The virtual currency’s China woes in December caused its value to plummet, from above $1,000 to around $380 on the Chinese exchanges, but this week climbed to $1,119 yet again, after popular online game developer Zynga Inc. (Nasdaq:ZNGA) began accepting bitcoins for in-game payments in a limited scope.