The crypto space in China is up for a major change as a Shanghai court has ruled that owning cryptocurrencies like Bitcoin (BTC) should be considered legal as per Chinese law.
The Shanghai Songjiang People’s Court Judge Sun Jie declared this via a WeChat account of the court. Jie further went on to explain how this is possible as he underlined the difference between personal holdings and tokens held by businesses.
As per the Judge, Chinese citizens can legally hold Bitcoin or any other digital asset but business entities can't. Chinese enterprises are still forbidden to invest in crypto investments or offer digital assets’ tokens without regulation.
This clarification was issued while the Court was hearing a legal dispute between two business enterprises that were allegedly offering an ICO. This is deemed illegal fundraising as per Chinese law.
Beijing has long considered cryptocurrencies as something that can destabilise the country's financial system. Earlier in 2023, China banned crypto exchanges and ICOs. It further strengthened its crypto crackdown by outlawing Bitcoin mining. Moreover, all business activities that involve cryptocurrency in any form have been banned in China since 2021.
However, as cryptocurrency trends are changing across the world, China is changing its digital assets' position. Judge Sun’s comment should be viewed in light of that as he highlighted how China classifies digital currencies as virtual commodities which have property-like features. Hence, people can own them as personal belongings, not business assets.
This is in line with Beijing's goal to safeguard the country's financial system from illicit monetary exercises done through digital mediums, especially those linked to computerised money.
Recently, an ex-director of the People's Bank of China, Yao Qian, highlighted the complex nature of the Chinese crypto regulations. Qian’s research led to his removal from his position as a Chinese government-led investigation found him guilty of accepting cryptos as political favours.
This shows the contradictions and tensions within the crypto regulatory framework of China, where Qian had a crucial role.
Before the recent clarification from Judge Sun, industry stalwarts were aware the personal holdings of cryptocurrencies were informally acceptable in China.
As per Chinese laws, digital assets fall under real estate property, ruled the court.
