Although China has heavily cracked down on the crypto sector in recent years, the situation appears to be reversing. A local Chinese court recently classified cryptocurrencies as property, and therefore entitled to legal protections under Chinese law. This decision is seen as a major turning point for the mass adoption of cryptos in China. However, many uncertainties remain. Focus on the adventures of this flourishing market in the land of the Dragon.
Legal protection of cryptocurrencies
A local court in Xiamen rules that cryptos should be considered property under the national legal framework. The court recognizes the economic attributes that digital assets possess. They are useful and have a value that exists objectively since they circulate legally in foreign markets.
Owning digital tokens should be legal as long as they are not used for illegal activities or obtained illegally, as reported South China Morning Post. This recognition has positive implications for the sector. In effect, this means that cryptos can be legally protected in China. Legalizing these types of assets will also help build investor confidence. But also the confidence of crypto companies, in this BRICS member country.
A contradictory position adopted by China
Although this recognition seems decisive for the digital asset industry, its future remains uncertain. The Chinese government has stepped up its crackdown on the sector by banning crypto trading and mining. A behavior completely at odds with Hong Kong which seeks to develop this sector. The High Court of this special administrative region of China has indeed recognized digital assets as property. It also granted licenses to cryptocurrency companies wishing to operate in the territory.
Additionally, the industry is taking another hit in China following Zhou’s Filecoin mining case. The court considers that this crypto does not benefit from legal protection. It therefore constitutes a threat to the national green development policy. These various reversals create an atmosphere of uncertainty in the crypto industry in China.
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