Chinese news reports suggest that the Chinese central bank met with more than 10 of the largest third-party payment processing companies in the country Monday, ordering them to cease transactions involving digital currencies like Bitcoin. This follows a Dec. 5 announcement from the central bank banning financial institutions from using Bitcoin. The bank argued that risks posed by Bitcoin speculation and criminals could end up hurting average Chinese consumers. After that announcement, Bitcoin value dropped 30 percent on Mt. Gox, from $1,240 to $870.
Before the government crackdown, Chinese interest in Bitcoin was on the rise. BTC China trading volume breezed higher than that of Mt. Gox, and it raised $5 million in venture funding in November.