Taobao, the country's largest customer-to-customer site, banned the transaction of virtual currency exchanges from Wednesday following a central bank notice.

No virtual currencies, including bitcoin, litecoin and related software, can be sold on Taobao, according to a company notice on Tuesday.

Alipay, which facilitates online payment on Taobao, also confirmed it will not support bitcoin-based transactions.

The People's Bank of China had ordered online firms and third-party payment platforms not to do business with bitcoin exchanges in China, meaning that holders of the virtual currency lack a channel to exchange their bitcoins for such currencies as the Chinese yuan or the US dollar.

By 11 am Wednesday, the price of bitcoins had dropped 16 percent from Tuesday, to 4,718 yuan.