bitseven.com - Chinese arbitrary court has ruled that Bitcoin’s legal status as a non-currency does not mean it is not a property.
Chinese citizens and merchants are legally allowed to own and transfer cryptocurrency. The Shenzhen Court of International Arbitration (SCIA) has affirmed that digital assets, specifically Bitcoin and several of its hard forks, are considered legal property by the current laws of the People’s Republic of China. SCIA released a case analysis through WeChat, the popular Chinese messaging app.
“Although Bitcoin may not be a legal currency, that does not prevent it from being protected by law as a property,” said SCIA in the released case analysis. “The Party contends that Bitcoin has characteristics of a property (SOV) that can be controlled by the owner; it has economic value and can bring economic benefits to the owner. This does not break any laws. This arbitrator agrees.”
Property, not Currency
The court’s ruling was on a dispute that involved a business contract in relation to the possession and transfer of digital assets. The defendant in the case argued that the ban from People’s Bank of China (PBoC) on crypto trading and ICOs, as well as the lack of venues to trade and transfer digital assets to the plaintiff, rendered a contract between the defendant and the plaintiff invalid.
However, the court disagreed, saying the September 2017 ban on trading and initial coin offerings does not cover contractual obligations that involve transfer of digital assets.
Katherine Wu, a cryptocurrency researcher at Messari, translated and analyzed the court documents released by the Shenzhen Court of International Arbitration to delve into the reasoning behind the decision of the arbitrator to consider Bitcoin as a property.
“Because the various legal definitions for crypto under current Chinese laws and regulation are unclear, the arbitrator relied on existing contract law and general provisions of the civil law to determine the contract that is at dispute here,” said Wu on Twitter.
Put simply, SCIA’s decision does not affect Bitcoin’s status as a legal currency, but affirms repayment contracts involving Bitcoin are not rendered invalid just because they involve digital assets.
“In the arbitrator’s view, whether or not bitcoin is legal, the circulation and the payment of bitcoin is not illegal. Bitcoin does not have the same rights as fiat, but that does not mean that holding or paying with crypto is illegal.”
Renewed Sino-Crypto Adoption
Although initial coin offerings and crypto trading are banned in China, the country’s attitude towards digital assets may not be as negative as it seems. Earlier this October, China’s oldest tech magazine and respected media company Beijing Sci-Tech Report (BSTR) announced its plans to accept Bitcoin from subscribers for its yearly subscription plan in an effort to use-cases of blockchain and crypto assets. BSTR’s subscription will cost 0.01 BTC (around $65).
Bitcoin adoption across businesses in major cities is also growing, with one hotel even rebranding itself as the ‘Ethereum Hotel’, providing discounts and other benefits to guests who pay for their stay in ETH.
In light of those recent developments, some commentators, including Wu, noted that the Chinese government remains positive towards cryptocurrency, and that the ban on crypto trading had less to do with negative crypto attitudes, and more to do with prevention of Chinese yuan devaluation and limiting speculation on the market.
Wu concluded her analysis on Twitter with “ps China does not hate bitcoin.”
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