Industrial and Commercial Bank of China bans bitcoin and litecoin-related accounts

In terms of total assets and market capitalization, the Industrial and Commercial Bank of China (ICBC) is the largest bank in the world. The ICBC controls nearly $15.5 trillion in assets, and had a net income of more than $200 billion dollars in 2011. As powerful as the ICBC is, however, it still answers to the People’s Bank of China. And the PBoC wants bitcoin and other virtual currencies out of the Chinese banking system.

Today, bowing to PBoC pressure, the ICBC banned accounts tied to bitcoin and litecoin-related businesses. In a statement, the ICBC said:

From this date, any institution or individual must not use accounts set up with our bank for the deposit and withdrawal … and transfer of funds for Bitcoin and Litecoin trading.”

Although not unexpected, the move is not a welcome one in the Chinese bitcoin community. Other major Chinese banks have either banned or greatly restricted access to accounts for bitcoin exchanges and related businesses in recent weeks. At least two exchanges have closed due to the increased pressure, and several more have had their user-deposit systems blocked. In total, ten of China’s major banks have issued some form of “ban” on bitcoin businesses in recent days.

One surprising twist, however, is the impact of the PBoC-pushed bans on the larger bitcoin price. Rather than the dramatic plummet in price seen only weeks ago when the bans were still unconfirmed rumors, BTC prices have actually risen slightly over the last week. With China’s total bitcoin trade volume now in the single digits, and with several waves of “panic sells” decreasing total BTC and LTC volume in China, the country’s influence over the price appears to be increasingly negligible.