A Chinese court is breaking new ground on virtual assets, recognizing them as legitimate property protected by law. All this despite a blanket ban on cryptocurrencies imposed by the government in 2021. It’s an important development that could affect how virtual assets are treated in the country.
China’s courts in opposition to the government
China’s people’s courts, which enjoy independence from the government, have long dealt with a variety of issues, including those related to property. In a recent report entitled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case,” a Chinese court found that virtual assets have economic attributes, making them eligible to be considered property. Although the Chinese government has imposed a ban related to cryptocurrencies, the court ruled that when individuals own virtual assets, they are legal and protected by law under current regulations.
This new view is a significant step toward recognizing the value of virtual assets and sets a precedent in China’s legal system. It also suggests that criminal-civil law will need to be adjusted to take into account the unique aspects associated with virtual assets. This benefits not only cryptocurrency holders, but also society as a whole, as equivalent treatment of personal property rights and societal interests is crucial.
The status of the relationship between cryptocurrencies and China: “it’s complicated”
This is not the first time Chinese courts have come out in favor of the government’s strict regulations on cryptocurrencies. Last year, a lawyer suggested that cryptocurrency holders in China are protected by law in case of theft or breach of a loan agreement. All this despite the aforementioned ban on cryptocurrencies. A Shanghai court also confirmed that bitcoin can be considered virtual property. These developments indicate a change in tone in China’s approach to the market.
An increase in cryptocurrency-related activity in China is also apparent. After Bitcoin mining was banned in the country, the market has come back to life and gained the second place in the ranking of global cryptocurrency markets.
A chance for a revolution
Although the Chinese government maintains a hostile stance toward Bitcoin and other cryptocurrencies, the court’s decision may indicate an evolution in the country’s policies. The adoption of cryptocurrencies and cryptocurrency-related innovations could become an important part of the Chinese government’s future strategy in finance and technology. However, the question still remains as to what the next steps will be and whether the government will continue to soften its position towards the market.
