With new reassuring policies and a market on the rise in this summer period, everything seems to be going well for the digital gold and the distributed registry. The American government has finally made the distinction between Bitcoin and Libra. Finally, China recently pronounced for the second time its decision on the legality of owning Bitcoin, thus giving the decentralized digital currency greater credibility. This news is a complete reversal of the situation since China was one of the first countries to formally ban the use of crypto-currencies.
The Hangzhou Internet Court is moving in the same direction as the Shenzhen courts, which had declared in 2018 that Bitcoin “is an asset that must be protected in accordance with the law” and that it is legal to own and transfer it. Indeed, it was decided that Bitcoin would have the status of virtual property. As a result, the Chinese have the right to own Bitcoins within their country and benefit from Chinese legal protection in the event of a disagreement.
The decision would have been made during a bitcoin ownership dispute that took place several years ago. The good news was relayed on Twitter by a certain Dovey Wan and said for the first time that Bitcoin is recognized as a virtual property with a monetary value due to its rarity.
WOW ? BITCOIN IS LEGALLY PROTECTED IN CHINA
Today the first property dispute case on Bitcoin finalized trial in a local Chinese court. The court confirmed the “virtual property” attribute of Bitcoin, recognized it as a virtual property with valuehttps://t.co/W8ZeqLCYge
— Dovey Wan ? ? (@DoveyWan) 18 juillet 2019
For more details:
The court ruled on the status of Bitcoin following a property disagreement that took place in 2013 when Bitcoins were worth much less than they are now. The plaintiff reportedly purchased 2675 BTCs for 20 000 yuan, the equivalent of $2,900 on Taobao, the main online store at that time. Wanting to recover his funds in 2017, he discovered that the site had closed following China’s decision to ban crypto-currencies. As a result, it was not possible for him to contact the former operator to recover his funds. The plaintiff lost his trial due to a lack of evidence.
Nevertheless, the court issued an important decision for Bitcoin and stated according to The Beijing News, the following:
“Bitcoin holds the characteristics of a property. It is precious, rare and not very available. Therefore, we should recognize it as a virtual property under the “general civil law”. Virtual property is legally protected by the laws of the People’s Republic of China.
In response to this decision, blockchain expert Cao Yin told the Global Times “it is a clear signal that financial authorities are beginning to relax control of digital and virtual money”. According to the same media, an official of the People’s Bank of China reacted by saying that even though Bitcoin has been declared as virtual property, it is by no means a “trust currency”.
This shows that the decentralized currency is not yet out of the woods and that it must face many obstacles before convincing the institutions. Indeed, since Bitcoin mining, trading and ICOs are still considered illegal activities within the country, the doors to trading using crypto-currencies are still far from being opened.
The Chinese will therefore have to be content with this decision to buy crypto-currencies and store them on wallets. Until further news of this kind is received, the People’s Bank of China is reportedly developing, like many other banks, its own crypto-currency. Could it be China’s counter-argument to Facebook’s Libra project?