Bitcoin’s value has fallen by more than 50 per cent on the back of reports the Chinese government has taken action to restrict trading in the digital borderless currency.
The South China Morning Post reports BTC China, the first Bitcoin and Chinese Yuan trading platform, said China has blocked local payment companies from clearing Bitcoin, with one Bitcoin falling to US$421 in value.
The value of Bitcoin has fluctuated hugely all year, with the digital currency worth only US$10 one year ago. In April it peaked at US$260 before plunging to US$160 a day later, while in October the arrest of Silk Road founder Ross William Ulbrich and the seizure of his Bitcoins led to drop in value from US$140 to US$129.
Duncan Arthur, an independent payments, mobile and African banking expert, earlier told HumanIPO the fluctuations simply meant Bitcoin was acting like a “real currency”.
“Look at movements of a state-backed means of exchange if you don’t believe day-by-day fluctuations can be so dramatic,” he said. “If a real country suddenly had a stream of revenue drop off, it’s currency would take a knock.”
There has been limited uptake of Bitcoin in Africa, with the majority of activity taking place in America and Europe.
Kenyan-based company Kipochi did sign an agreement with Safaricom in July to integrate its Bitcoin wallet with the M-Pesa mobile money service, but HumanIPO understands the giant Kenyan network cancelled it shortly afterwards under pressure from majority stakeholder Vodafone.
HumanIPO reported earlier this month Nairobi-based BitPesa was in discussions with multiple banks and network operators in Kenya over partnerships that could allow the mass introduction of Bitcoin remittance payments into the East African country.
Earlier this year South Africa, Ghana, Angola, Egypt and Libya all expressed an interest in hosting the continent’s first Bitcoin ATM.