In a significant legal decision, the Shanghai Second Intermediate People’s Court has ruled that Bitcoin and other cryptocurrencies are classified as virtual property and can be legally owned by individuals in China. This development has garnered widespread attention from the crypto community, with prominent commentator Ash Crypto highlighting the ruling on X.
The court’s decision follows years of ambiguity surrounding cryptocurrencies in China. While trading, mining, and other crypto-related activities remain banned under strict government policies implemented in 2017 and 2021, the recognition of Bitcoin as property reflects a nuanced stance.
According to reports, the court affirmed that despite its restrictions on commercial use, Bitcoin’s characteristics as virtual property—scarcity, value, and transferability—merit legal protection. With prominent blockchain companies like Ripple already setting their sights on the Chinese market, this represents progress for cryptocurrencies.
Legal Context and Implications
This case emerged from a dispute in which an individual sought compensation from a now-defunct cryptocurrency exchange. The court dismissed the compensation claim but acknowledged the ownership of Bitcoin under existing property laws.
This echoes earlier rulings, such as the 2018 Shenzhen Arbitration Commission’s judgment, which also classified Bitcoin as virtual property with legal protections.
The recognition is not without limitations. The People’s Bank of China maintains that Bitcoin and similar digital assets are not fiat currencies, reinforcing that they cannot be used for payments. This regulatory position ensures that while individuals can legally own cryptocurrencies, their practical use in commerce and trade remains highly restricted.
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Broader Implications for China’s Crypto Landscape
China’s crypto policies have often been characterized as contradictory. While mainland authorities enforce stringent bans, Hong Kong has embraced a progressive regulatory approach, aiming to position itself as a global hub for digital assets. This divergence highlights the growing complexity in the region’s crypto landscape.
Experts suggest the Shanghai ruling could serve as a foundation for more open discussions about cryptocurrency regulation. Former finance officials and industry leaders in China have called for reevaluating the outright ban on crypto, arguing that well-regulated adoption could benefit the nation’s digital economy.
Reactions and Industry Outlook
This ruling indicates a subtle shift in perspective, especially as global crypto policies evolve and competition in blockchain technology intensifies. As part of the BRICS bloc, China’s stance could soon change. BRICS is looking to move away from the U.S. Dollar and adopt an alternative to SWIFT, and XRP stands out as a potential solution.
The ruling has sparked optimism among cryptocurrency advocates, who see it as a step toward broader acceptance. Ash Crypto described the decision as an acknowledgment of Bitcoin’s inherent value, and believes this development can “send it higher.”
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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