Cryptocurrency Recognized as Personal Property in China
In a significant legal clarification, the Shanghai Songjiang People’s Court has ruled that owning cryptocurrencies is not illegal in China. The court’s judgment on November 18 recognized digital assets as having “property attributes” under Chinese law. However, their use is strictly limited to personal ownership and commodity purposes, not as legal tender or tools for investment.
Judge Sun Jie, presiding over the case, stated that while Chinese law does not explicitly ban individuals from holding cryptocurrencies, strict regulations from the People’s Bank of China and other authorities prohibit crypto-related business activities. This judgment emerged during a dispute involving two companies over an initial coin offering (ICO), which remains illegal in the country.
Key Highlights of the Ruling
- Personal Ownership Allowed: Cryptocurrencies are considered virtual commodities with property value, enabling individuals to legally hold them.
- Business Restrictions Remain: Commercial entities are barred from engaging in crypto trading, investment, or token issuance.
- No Legal Tender Status: Virtual currencies do not hold the status of official currency and are subject to tight regulatory oversight.
Judge Sun Jie emphasized:
“Although it is not illegal for an individual to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own at will.”
Crypto Community Reactions
The global crypto community has responded positively, interpreting the ruling as a potential softening of China’s traditionally rigid stance on digital assets.
Max Keiser, a well-known Bitcoin advocate, hailed the decision as a pivotal step toward recognizing Bitcoin’s growing influence. Meanwhile, Eliézer Ndinga, VP at 21Shares, clarified that while the legal position for individuals remains unchanged, the ruling reiterates the strict prohibition of commercial activities.
Ndinga remarked:
“[China has] nothing like the Executive Order 6102, which forbid holding gold in 1933 in the US.”
Subtle Shifts in China’s Crypto Landscape?
Despite strict regulations, there are signs of gradual change. For example, Nano Labs, a China-based crypto mining chip company, has reportedly started accepting Bitcoin payments. Such moves suggest a possible easing of China’s stance on digital assets.
As the global crypto market evolves, these rulings underline the complexities of balancing innovation with financial stability. While businesses in China face significant restrictions, the recognition of cryptocurrency as personal property may pave the way for future regulatory adjustments.
Bitcoin Momentum Continues
China’s ruling coincides with Bitcoin’s strong market performance. Fueled partly by Donald Trump’s recent election victory, Bitcoin’s value has soared, trading above $97,000 at press time, according to CryptoSlate data.
The developments in China are being closely watched by the crypto community worldwide, signaling that even in highly regulated markets, the influence of digital assets continues to grow.