Bloomberg News

Bitcoin Banned by Alibaba’s Taobao After China Tightens Rules

January 08, 2014

Bitcoin Logo

A computer screen displays the Bitcoin currency logo on an internet website in London. Photographer: Chris Ratcliffe/Bloomberg

Alibaba Group Holding Ltd., China’s largest e-commerce website, will ban the sale of Bitcoin and other virtual currencies after the country’s central bank tightened regulations in December.

Taobao Marketplace, one of the main platforms that link buyers and sellers on Alibaba, will bar from Jan. 14 the sale of Bitcoin and related products, including mining software and hardware for the virtual currency, the company said on its website yesterday.

China’s central bank stopped financial institutions from handling Bitcoin transactions after the virtual currency’s value jumped 89-fold. Alibaba’s move to ban the sale of virtual currencies and related products will help protect users, according to the company.

The Rise of Bitcoin

None of Alibaba’s platforms have accepted Bitcoin as a payment method in the past, and the company’s Alipay payment affiliate doesn’t support websites that use Bitcoin, Florence Shih, a spokeswoman for Alibaba in Hong Kong, said by e-mail.

“Alibaba’s new rules might be a result of recent central bank regulations and concerns about risks associated with Bitcoin,” Wang Weidong, an analyst at Shanghai-based Internet consultant IResearch, said by phone today. “The changes will have quite a big impact on Bitcoin trading in China.”

A number of third-party payment systems have also stopped processing transactions for Bitcoin purchases. Payment provider YeePay gave notice last month to BTC China, the largest Bitcoin exchange in the country, that it could no longer provide payment services. TenPay, a payment provider owned by Tencent Holdings Ltd. (700), also halted service with the exchange.

Users can now buy vouchers from resellers recommended by BTC China, which will be credited into their accounts with the exchange for Bitcoin trading, according to the company’s website.

To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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