Earlier today, Chinese government banned the country's Banks from using the virtual currency 'Bitcoin', warning that it could be used for illegal activities.

After China banned Banks from using Bitcoin in transactions, the Bitcoin prices fell from $US1,240 to around $1,079.

The government pointed out the list of risks using the virtual currency that has 'no price limit', 'higher risk of money laundering' and the risk of being exploited for criminal activities such as drugs and guns.

Considering the risks of using Bitcoins, the China Government concluded the bitcoin could not meet the requirements to be used in Bank transactions.

The public is free to use the Bitcoin in their online transactions if they ready to take care of the risks.