In China, the Shanghai Second Intermediate People’s Court officially recognized Bitcoin as a “unique and non-reproducible” currency.
As pointed out by Justin Sun, the founder of the Tron network, a Chinese Shanghai court has officially recognized bitcoin cryptocurrency as legal property providing it with some legal protection.
Despite China’s official stance against cryptocurrencies as legal tender, the Shanghai Second Intermediate People’s Court recently published an article acknowledging Bitcoin’s legitimacy. By the court’s analysis, if one takes into account the five functions of money, namely, value scale, circulation means, storage means, payment means and world currency, bitcoin appears to perform the function of currency. In addition, the cryptocurrency has undeniable property attributes.
The court has also emphasized Bitcoin’s scarcity, uniqueness and inherent value. Such a recognition is noteworthy in a controversial and unclear legal landscape where trading crypto on international exchanges remains illegal.
For crypto enthusiasts, this formal acknowledgement is a sign of a possible dramatic change in Chinese financial policies. Public sentiment immediately went high, anticipating the upcoming reevaluation of government stance on cryptocurrencies in China.
We shall remind you that in 2021 cryptocurrency market crashed amid China crypto ban. Nevertheless, just a month from Chinese news, the global crypto market stabilised and Bitcoin prices rose to new highs.
At the same time, Chinese authorities continued its hostile to crypto policies. In 2022, the government implemented strict measures to eliminate international foreign exchange and initial coin foreign exchange utility, effectively banning international cryptocurrency trading.
Notably, local courts have previously suggested that the law might still extend protection to crypto holders in cases of loss or breach. In May 2022, a No. 1 Shanghai court also declared Bitcoin as property existing solely in cyberspace.
Meanwhile, Hong Kong Special Administrative Region of the People’s Republic of China has repeteadly shown a milder stance on crypto. This February, the city-state proposed crypto regulations that would let retail investors trade certain “large-cap tokens” on licensed exchanges, emerging as one of the new hubs for the virtual asset industry. In April, ruling of a Hong Kong court also suggested that cryptocurrencies have property attributes, giving local insolvency practitioners greater clarity in terms of digital assets.