China is among the largest crypto markets in the world. However, the latter has experienced a battle with cryptocurrency. The federal government attaches great importance to the security of individuals’ assets. In September 2021, the People’s Bank of China (PBOC) banned all cryptocurrency transactions. In light of this, the Shanghai High Court intends to impose the security of property rights on Bitcoin under Chinese law.
Bitcoin, a virtual asset with economic value
The statement relates to a case dating back to October 10, 2020. During that time, Cheng Mou filed a complaint with the Shanghai Baoshan People’s Court. The latter demanded a refund of his Bitcoin from defendant Shi Moumou. In February 2021, the court ruled that Shi must return his BTC to Cheng within 10 days of the judgment. Shi refused to do so, forcing Cheng to introduce higher authorities. Eventually, the case was brought to the People’s Court in Shanghai.
The whole world knows about China’s controversial relationship with bitcoin (BTC) and other cryptocurrencies. The Shanghai People’s Court statement changes the course of history. In fact, bitcoin (BTC) is recognized by the latter as a virtual asset protected by Chinese law.
The trial court asserts that Bitcoin has economic value, accessibility and scarcity. It thus fits the definition of virtual property and is now subject to property rights. The court said on its official WeChat channel: “In current trial practice, the Public Court issued a unanimous opinion on the legal position of Bitcoin and identified it as virtual property.”
It was a statement that relieved the victims of the recent downturn in the cryptocurrency market. However, the government has yet to lift the restriction on crypto-asset trading.
The Shanghai court is at odds with the Chinese government
The decision opposes the Chinese government’s stance on cryptocurrencies. Last year, it banned trade, mining activity, bond issuance, token sales and all digital asset – related activities. Financial institutions doing business with bitcoin and other cryptocurrencies have been banned.
In September 2021, the People’s Bank of China along with nine state institutions labeled crypto operations as illegal financial activities. According to China’s central bank, cryptocurrencies compromise individuals ’assets.
As China bans cryptocurrency trading, the Shanghai High Court announces protection of commercial or residential property rights for Bitcoin under Chinese law.
Recognition of bitcoin as a virtual property can be significant. It is a decision that sets a precedent for the perception of digital assets in Chinese law. At the same time, China is testing the payment of taxes through a CBDC or central bank digital currency, including the digital yuan.
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Interested in investment and financial markets after a business school in Chambéry, the passion for cryptocurrencies was evident. The blockchain is definitely the universal tool of tomorrow.