IMPORTANT POINTS:
- Shanghai court recognizes Bitcoin as a digital currency, despite Chinese ban on cryptocurrencies.
- The recognition is based on the rarity, global acceptance and monetary qualities of Bitcoin.
- Although it does not alter official policy, it strengthens legal positions regarding cryptocurrency ownership within current restrictions.
The recent disclosure by the Shanghai People’s Court in China has highlighted the recognition of Bitcoin (BTC) as a unique digital currency, despite the country’s official ban on cryptocurrencies.
This news has caught the attention of several influential figures within the cryptographic ecosystem, with Justin Sun, the founder of Tron, being one of the first to highlight the publication made by the Shanghai Intermediate People’s Court No. 2, which outlined certain distinctive characteristics of Bitcoin.
In the article, the Shanghai court recognized Bitcoin as a distinctive digital currency, differentiating it from virtual counterparts such as Q coins. He highlighted the rarity of Bitcoin, its global acceptance and its inherent monetary qualities. These appreciations contrast with China’s conventional classification, which viewed cryptocurrencies as speculative investments.
The cryptocurrency ban
Regulatory authorities in China have maintained a strict stance banning cryptocurrency trading and mining. However, the court expressed that Bitcoin’s powers make it difficult to ignore in legal contexts. In situations of disputes involving theft or ownership, the article suggests that Bitcoin may be considered personal property, acquired through purchase, mining or inheritance.
This announcement expands on a previous decision made by a Shanghai court in May 2022 that also recognized the legitimacy of Bitcoin. On that occasion, a legal expert argued that China’s laws could in fact protect cryptocurrency holders despite the trading ban.
It is crucial to note that the recent article does not represent a change in official policy. The ban on cryptocurrency trading remains firmly in place. However, the recognition of cryptocurrency as property strengthens legal positions related to property within existing restrictions.
The recognition of Bitcoin in Shanghai sets an interesting precedent in a country that has been critically restrictive towards cryptocurrency adoption. On the other hand, this recognition could serve as a discussion point for future legal and regulatory deliberations both in China and on the global stage.
