BTC China Starts Accepting Deposits In Chinese Yuan Again

BTC China, the world’s largest bitcoin exchange, has started allowing users to purchase the digital currency with Chinese yuan again. This is significant because BTC China stopped accepting deposits in renminbi last month after the People’s Bank of China issued a memo warning national financial institutions not to trade in bitcoin. That decision triggered a quick and massive drop in its value. It also hurt Bitcoin’s public image, which has taken several shots in the past few months.

BTC China CEO Bobby Lee told the Wall Street Journal that the exchange started accepting renminbi again on Thursday after studying the PBOC memo and determining that it was legal to accept deposits and transfer money into customer accounts, even though the banks that manage those accounts can’t conduct business in bitcoin.

Reddit users and Coindesk picked up on BTC China’s decision, even though the exchange tried to keep it low profile. BTC China has not made an official announcement and timed the change to coincide with the Lunar New Year holiday, when trading volume is low. It’s still too early to tell what impact BTC China’s decision will have on bitcoin’s value.

Lee told WSJ that BTC China, which recently closed a $5 million Series A round from Lightspeed China Partners and Lightspeed Venture Partners, is treading carefully because the Chinese government can change its policies at any time.

The Chinese government has taken a negative attitude toward digital currencies before. In 2009 the Chinese government banned the use of another popular digital currency, QQ, for the purchase of real-world items. Bitcoin is harder to control than QQ, however, because QQ was centrally managed by Internet company Tencent.

“We are definitely in compliance with the Dec. 5 memo, but the government and the government agencies can change the rules anytime in the future. So we are going to take a wait-and-see approach,” Lee told the WSJ. We’ve emailed him for further comment.