Banking regulators in Beijing and Shanghai have ordered local cryptocurrency exchanges to shut down, state media reported Tuesday, in the latest blow to the once flourishing Chinese market for virtual money.

A Beijing-based regulator required all exchanges in the city to submit a plan by 6:00 pm on September 20 for winding down their operations, according to the official Xinhua news agency.

Shanghai's exchanges were also ordered closed last week, it said, without providing more information.

The international value of bitcoin has plunged in recent days amid speculation that the Chinese authorities would shut down the trading platforms following a ban on initial coin offerings earlier in the month.

It was trading at $3,969 Tuesday, down from highs around $4,359 a week ago.

Xinhua's report follows announcements last week by China's two largest bitcoin platforms -- BTCC and OKCoin -- that they would stop all trading operations following new Chinese government regulations clamping down on crypto-currencies.

The Chinese central bank's announcement on September 4 meant that firms would no longer be able to issue electronic currency units to raise funds.

Following the decision, the National Internet Finance Association of China said last week there was "no legal basis for platforms which engage in the trading of various forms of 'virtual currencies'".

The association, which was created by the central bank, warned on its website that such currencies are "increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising".

The central bank's move was seen as a way for Beijing to gain control over crypto-currencies, which are created using blockchain technology and are sold and bought online without any government regulation.

In an attempt to halt capital flight overseas and clean up its financial system, Beijing began early this year to tighten controls on bitcoin trading platforms by restricting, in particular, transactions considered excessively speculative.

The two main Chinese platforms, BTCC and Okcoin which operate in yuan, accounted for 22 percent of the world trade in bitcoins in early September, according to reference website bitcoinity.org.

Source: AFP