Late today Bitcoins were trading at 3,430 yuan (USD 565) each on China's biggest trading platform BTC China, up more than 70 per cent from an intra-day low of 2,011 yuan on yesterday.
But despite the recovery the Bitcoin price in China lagged behind those on major global exchanges. Price differences between them are usually small.
Bitcoins were trading at USD 714 each on Japan's Mt Gox and being quoted at USD 665 on UK-based BitStamp, data from their respective websites showed.
Domestic third-party payment companies were barred from providing clearing services for virtual currency trading platforms, state-run media have reported, adding the instruction was given at a closed-door meeting.
Also Read
Bitcoin, invented in the wake of the global financial crisis by a mysterious computer guru using the pseudonym Satoshi Nakamoto, is a form of cryptography-based e-money.
But Beijing keeps a tight grip on the yuan and enforces capital controls, which are threatened by the very nature of the e-currency.