Bitcoin crashes as China's biggest exchange blocks Yuan deposits

Value of one Bitcoin dropped as much as 2,551 yuan (£257)

China's biggest Bitcoin exchange has stopped accepting deposits of Chinese yuan, prompting a decline in the price of the digital currency of more than a third in one day.

The exchange, BTC China (BTCC), announced today it had been forced to suspend the intake of Chinese currency after a recent  ban on Chinese mainland financial institutions using Bitcoin (BTC) was extended to all third-party payment service providers.

China is the largest Bitcoin market in the world, and prices fell as low as 2,551 yuan (£257) for one Bitcoin following the news. It  had been trading as high as 4,136 yuan (£416) just hours before the announcement.

The ban was issued by the central bank, the People’s Bank of China, after it had moved to crack down on use of the currency this month.

The bank said it was part  of an effort to protect the yuan’s legal standing, prevent money laundering and maintain stability, among other reasons.