Popular Chinese bitcoin exchange BTC China has restored a facility allowing customers to purchase bitcoin by depositing yuan into the exchange's corporate bank account.

The move reverses a decision in December to halt such deposits, which the exchange made in response to a Dec. 5 memo from the People's Bank of China warning national financial institutions not to trade in bitcoin. Those twin developments threatened to curtail volumes on BTC China, which had grown to become the biggest bitcoin exchange in the world, and prompted...