Bitcoin Now Legal in China as Property But not Legal Tender!
(By Glenford S. Robinson)
The Chinese government had cracked down on the sale, purchase, and trading of Bitcoin and other Cryptocurrencies a few months ago, such news caused the price of Bitcoin to plummet considerably. In fact, the price of Bitcoin hasn’t fully recovered from such onslaught of negative cryptocurrency news coming out of China.
The truth of the matter is that the cryptocurrency space got it all wrong about China banning Bitcoin and other cryptocurrencies. The Chinese government was only trying to protect its citizen against the high risk of buying, selling, and trading Bitcoin and other cryptocurrencies. They weren’t necessarily banning it because they didn’t recognize it. So, let’s get the story straight.
The Shenzhen International Court of Arbitration as recently as 2 days ago ruled that “Chinese laws and regulations do not prohibit privately held and legally transferred bitcoin.” This ruling stems from a real arbitration case of the equity transfer contract dispute accepted by Shenzhen International Arbitration Institute (Shenzhen Arbitration Commission).
This case involves the ongoing dispute over the equity transfer of Bitcoin (BTC), Bitcoin Cash (BCH), and Bitcoin Diamond (BCD). The ruling also stated that the Bitcoin return contractual agreement “concluded between the private individuals does not violate the mandatory provision of the legal and regulatory effects and should not be considered invalid.”
The court’s ruling continued by saying that “although Bitcoin exists in the virtual space of the network, it has special characteristics in terms of possession and publicity of rights change,” which “does not prevent it from becoming an object of delivery.”
The most compelling remark yet by the Shenzhen, China, International Court of Arbitration is that “Bitcoin is not a legal currency, but this does not prevent it from being protected by law as a property. Bitcoin has property attributes that can be dominated and controlled by manpower, have economic value, and can bring economic benefits to the parties. This is the meaning of the parties’ agreement and does not violate the legal provisions. The arbitral tribunal recognizes this.”
To clarify things the court went as far as to say “Before the laws and regulations define Bitcoin, the arbitral tribunal cannot forwardly identify it as “network virtual property” as stipulated in Article 127 of the General Principles of Civil Law, but can reversely identify that it is neither a currency issued by the monetary authority. It is also not electronic of legal tender and does not generate interest.”
According to the Chinese Arbitration Court as of this moment, “China has not clearly defined the concept, legal attributes, and delivery of bitcoin based on blockchain technology at the legal and administrative level. Under the current legal system, the arbitral tribunal affirmed the property attributes of Bitcoin in accordance with the provisions of the General Principles of the Civil Law, the “Contract Law” and the contractual agreement, and the principle of good faith and the arbitration concept of respecting party autonomy. Protection and proper handling of private Bitcoin contract disputes.” So, there you go. That is the current status of Bitcoin in China.
This could be perceived as very good news for Bitcoin and Cryptocurrency as a whole in China. It is clear in this article that China has not ban the use of Bitcoin and other Cryptocurrencies and is currently conducting more research on Blockchain technology, so the country can do more to incorporate the technology into its financial infrastructure.
I am a Clinical Lab Scientist, entrepreneur, investor and trader (stocks and Forex). I enjoy writing and publishing articles online.