The Shanghai People’s Court, in a recent announcement, recognized Bitcoin as a unique digital currency in China, despite the country’s official ban on cryptocurrencies. A recent article was published, affirming certain characteristics of Bitcoin after it gained attention from Justin Sun, the founder of Tron, at the Shanghai No. 2 Intermediate People’s Court.
The article highlighted that the Shanghai court recognized Bitcoin as a unique digital currency, distinguishing it from virtual counterparts like Q coins. It cited Bitcoin’s rarity, global acceptance, and inherent monetary qualities. This contrasts with China’s traditional classification of cryptocurrencies as speculative investments.
China’s cryptocurrency ban remains in effect. It is worth noting that in 2017, the People’s Bank of China (PBoC) banned initial coin offerings (ICOs) and declared that cryptocurrency trading was illegal. The PBoC justified the ban by stating that ICOs constituted illegal fundraising, and cryptocurrency trading was viewed as speculative and posed a risk to the country’s financial system. This ban came during a period of heightened regulation of the Chinese economy by the government and was motivated by a desire to maintain control over the country’s financial system. After the ban, the Chinese government continued to take steps to limit the use of cryptocurrency in the country.
Regulatory bodies have prohibited cryptocurrency trading and mining in China. However, the court expressed the view that Bitcoin’s attributes make it challenging to ignore in legal contexts. The article from the Shanghai People’s Court, suggests that Bitcoin can be considered personal property, acquired through purchase, mining, or inheritance when disputes arise regarding theft or ownership.
This announcement builds upon a previous decision by a Shanghai court in May 2022 that also acknowledged Bitcoin’s legitimacy. At that time, a legal expert in an argument stated that China’s laws could indeed protect cryptocurrency holders despite the trading ban.
It’s essential to note that the recent article does not represent an official policy shift in China. The ban on cryptocurrency trading remains firmly in place. However, the recognition of cryptocurrency as property strengthens legal positions related to ownership within the existing constraints.