Beijing News is reporting that the Hangzhou Internet Court has recognized Bitcoin and other cryptocurrencies as ‘virtual property’ and should be protected under Chinese law.
The Hangzhou Internet Court has settled the legal question regarding Bitcoin in China by deeming it a ‘virtual property.’ Bitcoin has long been in legal limbo in China despite hosting some of the largest mining operations anywhere in the world. Now, we finally have some clarity on where regulation is heading.
Cryptocurrencies Are ‘Virtual Property’ Under Chinese Law
The Beijing News reports that the ruling applies not just to Bitcoin, but all cryptocurrencies. Under this, all of them should be considered ‘virtual property’ and be protected under existing Chinese regulations. This is because cryptocurrencies are “valuable, scarce, and disposable,” read court documents.
However, this is not the first time a Chinese court has ruled on cryptocurrencies. For example, in 2018, the Shenzhen Arbitration Commission ruled that crypto-assets fall under ‘property ownership’ and should be protected. It seems that the recent ruling by the Hangzhou Internet Court confirms this earlier decision.
The court determined Bitcoin to be a virtual property due to it being “valuable, scarce, and disposable.” The case stemmed from a dispute back in 2013 when the plaintiff purchased Bitcoin from a site called FXBTC. Storing them in a virtual wallet on the site, he was unable to retrieve them in 2017, which prompted him to sue the exchange. Although the plaintiff’s claim was ultimately rejected, the court did affirm Bitcoin as virtual property.
An Indication of Loosening Cryptocurrency Regulations?
The news is shocking considering how hostile China has been to cryptocurrencies in the past few years. This year alone, the Chinese government added cryptocurrency mining under its list of industries which it plans to phase out in the coming years. Of course, ICOs are also banned in China along with most cryptocurrency trading.
However, there’s indication now that this stance may be changing. With the country’s State Council mulling over plans to create its own state-backed cryptocurrency, we may see a resurgence of interest in cryptocurrencies in the country. That, and we’ve seen a top financial Chinese news outlet add cryptocurrency price tickers to its application.
If the regulations loosen up, China could position itself as an epicenter of cryptocurrency trading. After all, it boasts a massive tech sector along with a growing middle class which trumps most other nations. It remains to be seen how the ruling will affect Chinese Bitcoin holders, however. But, it’s good news for the space in a country whose government has mostly been hostile to cryptocurrencies.
Do you believe that the court ruling will stand? Is it an indication of more good news to come? Leave your thoughts in the comments below.
Images courtesy of Shutterstock.