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|Subject: China tightens controls on Bitcoin trading platforms Thu Feb 09, 2017 7:40 pm|| |
|Chinese bitcoin trading platforms risk closure if they breach new controls on the virtual currency, the central bank said Thursday, as authorities step up efforts to curb the flow of money offshore.|
During a meeting Wednesday with officials from nine Beijing-based bitcoin trading platforms, a People's Bank of China (PBoC) inspection team unveiled a series of restrictions on the digital unit.
The PBoC said it has banned the platforms from margin trading, a widespread practice that allows investors to go into debt to buy bitcoin and repay their loans with gains made by the currency.
Trading platforms are also forbidden from "money laundering" and practices that "would violate foreign exchange or tax laws" -- those that do risk closure by the authorities.
The strong depreciation of the yuan against the dollar and concerns over the weakening economy are prompting investors to move their capital out of China into safer and more lucrative investments.
To curb the massive capital flight, estimated at $700 billion in 2016, Beijing has launched drastic measures including tightening controls on individuals' foreign currency purchases -- cited as driving bitcoin demand.
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