Lately, the Chinese government keeps implementing new crackdowns against cryptocurrencies. It is for this reason that the decision of one of the Chinese courts surprised more than one. A court in China has indeed said that crypto trading can now be done. However, it specifies that the use of crypto as a substitute for fiat currency remains prohibited.
Cryptocurrencies are legal in China, but not for payment
Bitcoin (BTC) was totally banned in China
It all started in 2019 when China officially banned cryptocurrency trading on its territory. However, this restriction has in no way prevented this trade from continuing online via foreign stock exchanges.
In May 2021, cryptocurrency mining also became illegal in China. In June 2021, China’s central bank ended up banning financial institutions, payment companies, and online companies from facilitating cryptocurrency trading. Following this announcement, online exchanges of virtual currencies abroad became prohibited. They basically allowed to provide services to national residents
In short, the Chinese state did not allow foreign platforms to provide services to investors based in China. Result: all crypto transactions were considered illegal. The People’s Bank of China has even indicated that it will strengthen the monitoring of transactions related to cryptocurrencies.
A dispute that could change everything
As reported by the site Forkast, a court in China issued the decision to protect virtual assets following a dispute over the reimbursement of Litecoin (by prohibiting the trade). The court relied on the fact that: “There are no laws, by-laws, or departmental rules that negate the protection of cryptocurrency itself as virtual property. »
By protecting cryptocurrencies, China is taking a small step to reconsider this virtual asset. True, this is only a legal decision from a court. But it could be a factor that will push the state to reconsider cryptocurrency.
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