Bitcoin price dives after PBOC moves to bar support

The price of bitcoin plunged over 30 percent yesterday in China after reports said the central bank asked third-party online payment firms to stop supporting Bitcoin trading websites.[Special coverage]

Bitcoin's price was 3,600 yuan (US$590) by 4pm yesterday, a 35-percent plunge from 5,600 yuan on Monday, said BTC360, a Chinese bitcoin trading website. BTC China, the country's biggest bitcoin trading portal, was not accessible yesterday.

Bitcoin is a virtual currency which caused a frenzy in China, accounting for more than half of the currency's global trading volume, because its value surged above 80 times to over 7,000 yuan in a year.

Top third-party payment websites, including Alibaba's Alipay, have been told to stop supporting bitcoin websites like BTC360 and BTC China, media reported yesterday.

The People's Bank of China has said early this month it would bar financial institutions from being involved directly or indirectly in trading related to bitcoin as it tried to tighten controls over the digital e-money two weeks ago.

China also publicly said for the first time the bitcoin was not ''a currency with real meaning'' and didn't have the "same legal status as a currency."

But the PBOC said the public is free to trade bitcoin as a normal online product and service, but they undertake the risks by themselves.

Bitcoin was launched in 2008 by a programmer, or group of programmers, under the name of Satoshi Nakamoto.