Cryptocurrency clarified to be personal property in China, remains barred for businesses
A recent ruling by the Shanghai Songjiang Peoples Court has clarified that owning cryptocurrencies is not illegal in China.
The Nov. 18 judgment established that digital assets have property attributes under Chinese law. However, their use is strictly limited to personal ownership and as commodities, not as legal tender or investment tools.
Judge Sun Jie delivered this clarification while handling a case involving two companies disputing an initial coin offeringan activity deemed illegal in China.
Judge Sun explained that Chinese law does not explicitly prohibit holding cryptocurrencies. However, regulatory provisions from the Peoples Bank of China and other authorities strictly control crypto-related business activities.
She noted that virtual currencies lack the legal status of official tender but hold property value as virtual commodities.
The Judge furthered that individuals can legally possess cryptocurrencies, but businesses face significant restrictions because they are prohibited from engaging in crypto investments, trading, or token issuance.
She wrote:
Although it is not illegal for an individual to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own at will.
Crypto community reaction
The crypto community has responded positively to this development. Many see it as a potential softening of Chinas historically rigid stance on Bitcoin and other cryptocurrencies.
Bitcoin advocate Max Keiser interpreted the ruling as a significant shift, suggesting that China is beginning to recognize Bitcoins growing influence.
Meanwhile, Eliézer Ndinga, VP at 21Shares, clarified that the legal position remains unchanged. Individuals could always hold cryptocurrencies in China, but commercial crypto-related activities have long been banned. He stated:
[China has] nothing like the Executive Order 6102, which forbid holding gold in 1933 in the US.
Although China continues to view cryptocurrencies as a threat to financial stability, subtle developments like Nano Labsa China-based crypto mining chip companyaccepting Bitcoin payments have sparked speculation about a gradual shift.
These developments come as Bitcoins value continues its upward trend, fueled partly by Donald Trumps recent election victory. According to CryptoSlates data, the top asset is trading above $97,000 as of press time.
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Text source: CryptoSlate
