Despite the recent controversies involving the virtual currency Bitcoin and the restrictions imposed by China's central bank, the country saw its first Bitcoin ATM on Wednesday.

BTC China, which is one of the country's top Bitcoin exchanges, set up an ATM-like Bitcoin machine in a cafe at mall located in Zhangjiang Technology Park in Shanghai. The machine, however, does not involve the banking system and does not allow users to withdraw cash.

Like Us on Facebook

It functions like a vending machine, where people can buy Bitcoin directly from BTC China after inserting money into the ATM-like machine. The user's online account will then be credited by his purchase.

"It's just like buying coffee from a vending machine," said one Bitcoin enthusiast.

A Key Player in the Global Bitcoin Industry

Bitcoin in China is very restricted but it was the rising interest from mainland Chinese speculators that triggered the increase of Bitcoin prices globally last year to more than US $1,000.

China used to be the biggest Bitcoin market, with 50% of global Bitcoin trading in the country

The price, however, went down when the People's Bank of China (PBOC), the country's central bank, launched crackdown on the digital currency. As of Wednesday's trading, Bitcoin was priced below US $530 a piece.

PBOC Bans Banks from Providing Services to Bitcoin Traders

The PBOC earlier ordered Chinese banks and third-party payment companies to close trading accounts related to Bitcoin and told banks not to provide financial services related to the virtual currency.

Although the reason for the order was not disclosed, analysts said the PBOC was just trying to protect local investors following what happened with Mt. Gox, world's largest Bitcoin trader.

Millions of dollars worth of Bitcoin accounts were wiped out from Mt. Gox apparently due to a technical glitch, leaving users with millions of loses.

The PBOC banned banks from providing services to Bitcoin trading platforms. The services include account opening, currency exchange and payments. Banks immediately complied with the order even before the 15 April deadline set by the central bank.