Baidu, China Telecom Remove Bitcoin Following Chinese Bank Prohibition

The so-called "Google of China", Baidu, has stopped accepting Bitcoin as payment on any of its online properties — as has China Telecom. This near-synchronous cessation of payment transactions for the two companies in the digital currency, many believe, exacerbated the recent sudden downturn of Bitcoin's long and unprecedented rise in value. The USD Bitcoin value currently stands at $679.43 according to CoinDesk, down from $1,147 just before the People's Bank of China all but outlawed the payment option for banks.

The price of Bitcoin fell $300 USD immediately after the Bank outlawed the payment option for all financial institutions two days ago. Said the Bank: financial institutions "must not use Bitcoin to set the price for products or services, not buy and sell bitcoins... and not directly or indirectly provide other Bitcoin-related services including registering, trading, clearing or settlement," according to CoinDesk.

The reasoning for the outlawing was not that the currency is a threat to the financial system, but that "it interferes with normal monetary policy operation," said analyst Hao Hong for Bocom International Holdings Co. in Hong Kong. Yet Hong also characterized Bitcoin as "an unofficial leakage" to the system and said it is "difficult to regulate and could be used for money laundering."

Baidu and China Telecom, meanwhile, are thought to have dropped the currency just to be safe. Officially, the outlawing of Bitcoin only applies to financial institutions, but the two companies didn't want to risk reprisal from any branch of the Chinese government.

SOURCE: CoinDesk