Cryptocurrencies have long been a contentious topic in China, with the government imposing heavy regulation and outright bans on all aspects of the industry. However, a recent report by the People’s Court of China has challenged this historic position, re-recognizing virtual assets as legitimate property.
The report titled “Identification of Virtual Currency Property Attributes and Disposal of Property Involved in the Case” is quite different from traditional policies, and believes that virtual assets have the economic attributes of property.
This revelation is cited in Report In contrast to China’s blanket ban on foreign digital assets, the local publication’s statement asserts that virtual assets held by individuals should be legally protected under the current policy framework.
China's People's Court. Source: China Daily
This is not the first case in which a Chinese court has challenged the government’s cryptocurrency policy. In 2018, a case in Hangzhou marked a pivotal moment for Chinese courts to recognize bitcoin as “virtual property.”
Although trading and mining bitcoin was illegal at the time, the court justified its judgment based on intrinsic properties of bitcoin such as value, scarcity, and liability. It is uncertain whether this precedent influenced recent court rulings.
China’s Complicated Relationship With Cryptocurrencies
China’s historical stance on cryptocurrencies has been characterized by a series of strict measures. The government banned banks from dealing in bitcoin in 2013, followed by a crackdown on initial coin offerings (ICOs) in 2017.
Authorities then targeted bitcoin mining operations in 2019, culminating in a total ban on cryptocurrency trading and mining in 2021. These actions underscore the Chinese Communist Party’s unwavering efforts to control and limit the adoption of cryptocurrencies domestically.
This recent legal shift raises some interesting questions China’s Changing Views on Cryptocurrencies. While the court’s report may not directly challenge existing bans on cryptocurrency trading and mining, its recognition of virtual assets as legal property could pave the way for more nuanced regulatory discussions in the future.
Bitcoin falls back into the $25K region. Chart: TradingView.com
The way forward for Chinese cryptocurrencies
Chinese courts have recognized virtual assets as legal property, marking a major milestone in the cryptocurrency space. It offers a glimmer of hope for individuals holding virtual assets, even under strict government regulation.
Caution is warranted, however, as this realization may not lead to an immediate shift in government policy. China’s crypto industry continues to face challenges, but this court ruling shows a growing awareness of the economic significance of virtual assets.
As China grapples with the global evolution of digital currencies, the cryptocurrency community will be watching closely legal recognition Shaping the future regulatory environment.
While it is uncertain whether this ruling will lead to wider acceptance of cryptocurrencies, it cannot be denied that it certainly marks a noteworthy development in the ongoing debate about the legality and potential of digital assets in China.
Featured image from financial giant
