Bitcoin prices took a big hit on Wednesday after China's regulators ordered the country's payment processors to stop doing business with the country's Bitcoin exchanges.

BTC-China, the world's biggest Bitcoin exchange, said it would no longer take deposits in Yuan, effectively putting an end to the exchange's pipeline of new Bitcoin buyers.

Bitcoin, the world's most popular digital currency, which had been trading at about $700 on worldwide exchanges, dropped 35 percent to around $450 on the news. But then it did gain back some of that ground. At press time, bitcoins were trading at $575. That's about half what a bitcoin was trading at two weeks ago.

China's central bank met with payment processors on Monday, ordering them to "stop giving clearing services to bitcoin, litecoin, and other cryptocurrency exchanges," the South China Morning Post reported on Wednesday, citing the financial news site Yicai. The payment processors were told to sever their relationships with Bitcoin exchanges by the end of January, the Post said.

Bobby Lee, the CEO of BTC-China, couldn't immediately be reached for comment.

In early December, China cast a leery eye at Bitcoin, saying it wasn't a currency and banning banks from working with Bitcoin companies. Wednesday's move is a further attempt to rein in the digital currency.

Trading bitcoins in China isn't illegal. But without a path to pay cash to Bitcoin exchanges, buyers now have to meet face-to-face to acquire bitcoins. "Without exchanges it seems the only way to buy right now is to go through individuals," says Jake Smith – a Beijing-based Bitcoin trader, speaking via instant message. And that, he said, is a matter of "mostly just knowing the right people."

There are websites that help facilitate this type of transaction. Localbitcoins.com is the most popular here in the U.S., but at this point, there is no Chinese language equivalent of that site, Smith says.