A new ruling by Shanghai High People’s Court in China said Bitcoin is protected and has economic value
A new ruling from the Shanghai High People’s Court in China has added a new twist to their stance on cryptocurrencies after declaring Bitcoin a cryptoasset protected by Chinese law.
Bitcoin protected under Chinese law
The court also considers Bitcoin to have economic value. “In actual adjudication practice, the People’s Court has given a unified view on the legal position of bitcoin and determined it to be a virtual property,” the court said on its official WeChat channel.
In October 2020, Cheng Mou asked Shi Moumou to return a one (1) bitcoin loan that Mou claimed belonged to him. Moumou, the defendant, refused to return the bitcoins, taking the case to the District People’s Court. As of the May 2021 mediation, the parties have agreed that the respondent will provide compensation at a discount to the value of Bitcoin at the time of the loan.
The case was eventually referred to the Shanghai High People’s Court. The Supreme People’s Court is the highest in the Chinese states. This latest ruling could set a new precedent for how virtual assets are viewed in Chinese law.
Historically, the Chinese government has discouraged cryptocurrency trading, keeping miners away to reduce energy consumption. Last year, China banned all cryptocurrency trading and mining within its borders.
“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said in September last year. It also warned Chinese citizens that crypto trading could “seriously endanger the safety of people’s assets.”
China’s Supreme People’s Court is the highest local court in China’s provinces, ahead of the people’s courts and the intermediate people’s courts. Similar to how the Supreme People’s Court is structured, the High Court is also under the direct control of the central government.
Since then, China has made strides in introducing a central bank digital currency (CBDC) with its digital yuan. Since its launch, the use of the digital yuan has increased, with the cities of Xiamen and Guangzhou becoming the latest cities to incorporate the currency in the transportation sector. The People’s Bank of China announced that it would expand the CBDC pilot program to 11 new cities, bringing 23 cities under the program.
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