The Hangzhou Internet Court ruled that Bitcoin should be classified as virtual property, which simply legalizes the ownership of Bitcoin in China. The development was first reported by Beijing-based magazine Caijing.
The ruling came as a resolution to a dispute between a cryptocurrency exchange and one of its users who sued for lost funds in 2013. The Court’s ruling means transferring bitcoin is legal in China but trading is still banned.
While it doesn’t necessarily mean that China is now classifying Bitcoin as legal money (a la the Renminbi or the Yuan), it still means that its ownership is now no longer seen as illegal in the eyes of the law.
WOW 😲 BITCOIN IS LEGALLY PROTECTED IN CHINA
Today the first property dispute case on Bitcoin finalized trial in a local Chinese court. The court confirmed the "virtual property" attribute of Bitcoin, recognized it as a virtual property with valuehttps://t.co/W8ZeqLCYge
— Dovey Wan 🗝 🦖 (@DoveyWan) July 18, 2019
Are there still obstacles to Bitcoin’s legality?
The Hangzhou Internet Court is only the second legal authority in China to make such a ruling. In October 2018, the Court of International Arbitration in Shenzhen ruled that Bitcoin is protected under the laws of the land, highlighting that it is qualified to be referred to as property on the basis of its economic value. The Court’s ruling further clarified that the circulation of Bitcoin and support payments are, in fact, not illegal in China.
There’s a long walk to freedom ahead
Things are turning up for the crypto sector in China but there’s still a lot of work to do. So far, the adoption of Bitcoin and other crypto-assets have been stymied in the world’s second-largest economy. The government came down hard on the sector in 2017, placing a blanket ban on Initial Coin Offerings (ICOs) and cryptocurrency trading in the country.
To make matters worse, Reuters reported back in April, that the government was seriously mulling over the possibility of imposing a ban on Bitcoin mining as well.
Savor the moment
Still, for a country that has been unable to reap the fruits of the cryptocurrency-related innovations that a few other nations have, one can understand just why this development would excite Chinese crypto enthusiasts. Popular investor Dovey Wan took to her Twitter account to share her excitement, as she called the development a major milestone.
For now, it’s important to remember that Bitcoin is still not a form of payments or a legal tender in the country, as an official with the People’s Bank of China explained. However, given where they’re coming from and how significant (as Wan emphatically pointed out) this development is, you’d forgive the Chinese crypto lovers for savoring this victory as long as they can. Regardless of how we see it, the future sure looks bright.
One thing is certain, the sector is full of optimists who believe that at this point, Bitcoin and other crypto-assets are on the fast track to legality in China. There doesn’t seem to be anything stopping this wave, and given that the country is always looking to position itself as a forerunner in the tech space, illegalizing the use of the assets for any longer doesn’t seem to make any logical sense.
At this point, it’s safe to say that this isn’t a question of whether Beijing will legalize crypto; it’s a question of when, and in what form.