Bitcoin plunges on PBOC ban

China Telecom Corp Ltd, the largest mobile phone provider in the country, launched a promotion allowing a Samsung phone to be bought with Bitcoins, and Baidu Inc, the Chinese Google, is accepting payments for its firewall service in the currency.

Still, price volatility, combined with the PBOC's warning, led some businesses to change their policies on accepting Bitcoins.

In Shanghai, a realty developer said it had stopped accepting Bitcoins payment for apartments after the PBOC warning.

"We stopped accepting Bitcoins immediately after the central bank announcement on Thursday," said Luo Wen, a public relations manager at Shanda Interactive Entertainment, which is also the developer of a property project in Shanghai.

The company said in October that homebuyers could use Bitcoins to pay for its apartments near the Zhangjiang high-tech industrial park. But nobody ever actually bought a home in the project using Bitcoins, Luo said.

"We launched this campaign when the value of Bitcoins was around 1,000 yuan per coin, but then it surged to a peak of 8,000 yuan. We revised our accepted 'exchange rate' on a daily basis, but I guess no one would trade something appreciating that fast."

Financial regulators around the world have taken different stances on Bitcoins.

In the Netherlands, the central bank issued a cautionary note on Tuesday reminding people that there's no central issuer to be held liable for the virtual currency.

Depositors and investors who used Bitcoins could lose their money, the central bank said.

Germany's Finance Ministry in August recognized the Bitcoin as a "unit of account", meaning it can be used for tax and trading purposes in the country.

The virtual currency has been banned from trading in Thailand since July.