A Chinese Court Declares Bitcoin a Property
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The Hangzhou Internet Court, one of the top dedicated internet courts in China, officially recognized Bitcoin as digital property last week.
Although this doesn’t mean that China has now officially recognized Bitcoin as currency, it’s a step in a positive direction according to experts.
Many cryptocurrency enthusiasts and investors are hoping that this could help finally ease the Chinese government’s stance on Bitcoin.
At the moment, it’s a pretty far-stretched theory, but who knows – maybe the Chinese government finally recognizes the benefits Bitcoin offers and lifts the ban on local exchanges.
A Giant Step Forward
China is one of the biggest Bitcoin players on the global market, with more than 60% of the cryptocurrency’s hash power generated in the Asian country. Crypto farms, gambling rings, and illegal Bitcoin trading are common in China, which led to the government banning ICOs in 2017. The Chinese are now allowed to hold cryptocurrencies, but can’t legally exchange them for flat money via trading platforms. Peer-to-peer trading is still legal, though – well, not legal exactly, but it operates in a gray legal zone due to a regulatory loophole.
The latest ruling by the Hangzhou Internet Court may soon change all this. Last week, the court oversaw a dispute between a defunct exchange and one of its users. In 2013, the user named Wu bought Bitcoins worth $2,900 from the FXBTC exchange platform. He stored his Bitcoins on a digital wallet and forgot all about them for a few years. Imagine his surprise when he tried to access his Bitcoins years later in 2017 when he learned that the platform was dead.
He immediately hired a lawyer and filed a lawsuit against FXBTC, who didn’t give any prior notice about closing the platform. Wu demanded $11,000 in compensation, but the whole thing fell through due to lack of evidence. However, the Hangzhou court recognized Bitcoin as a commodity due to its value and the fact that it can be used for transferring value. Unfortunately, the court also noted that Bitcoin doesn’t have the legality of an official currency, meaning it doesn’t recognize it as money.
A Signal for the Future?
Bitcoin enthusiasts met the Hangzhou court’s ruling with a positive response. Dovey Wan, founding partner at Primitive and a self-proclaimed coin minimalist, first broke the news on Twitter to English audiences. She criticized English news outlets for not covering the news but saw it as a positive signal for the future of Bitcoin in China.
As Wan explained, this is the first major milestone that says “Bitcoin is legal in China”. China’s central bank which imposed the 2017 ban agreed with the court’s decision, but once again confirmed that Bitcoin shouldn’t be considered flat money. Still, it sees Bitcoin as virtual property as well, which might be a hint for the future.
With Bitcoin and cryptocurrencies taking over the Chinese gambling market, Bitcoin could very well be on its way to official recognition in Asia. Once this happens, and we hope it comes sooner rather than later, it will shift the global cryptocurrency landscape.
