Bitcoin Is Protected Under Chinese Law, Says China High Court

After proclaiming Bitcoin to be a virtual asset protected by Chinese law, the Shanghai High People’s Court added a new twist to its opinion on cryptocurrency.

The Court also determined that Bitcoin had monetary value. “The People’s Court has formed an unified opinion on the legal position of bitcoin in actual trial practice, and identified it as a virtual property,” it stated on its official WeChat channel.

Cheng Mou demanded that Shi Moumou refund a loan of one (1) bitcoin that Mou claimed belonged to him in October 2020. The defendant, Moumou, refused to refund the bitcoin, and the case was taken to the District People’s Court. The parties have agreed that the defendant will make restitution at a discount from the value of the Bitcoin at the time of the loan since the May 2021 mediation.

The case was subsequently taken to Shanghai’s High People’s Court. In China, the Supreme People’s Court is the highest court.

This recent decision may set a new standard for how virtual assets are treated under Chinese law.

In the past, the Chinese government has discouraged cryptocurrency trading, shunning miners in an effort to save energy. China outright prohibited all cryptocurrency transactions and mining within its borders last year.

The People’s Bank of China said in September last year that “virtual currency-related business activities are illegal financial activities.” It also warned Chinese citizens that cryptocurrency trading might “endanger the safety of people’s assets.”

In China, the highest municipal court is the high people’s court, which is preceded by the people’s courts and intermediate people’s courts. The High Court is constituted similarly to the Supreme People’s Court in that it is directly governed by the federal government.

With the digital yuan, China has taken moves toward creating a central bank digital currency (CBDC). The use of the digital yuan has increased dramatically since its inception, with the cities of Xiamen and Guangzhou being the most recent to adopt the currency in the transportation sector.

The People’s Bank of China stated that the CBDC pilot program would be expanded to 11 new cities, increasing the total number of cities participating in the program to 23.

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