China to Strengthen Protection of Bitcoin-like Cryptocurrencies
China will step up the protection of digital currency and online virtual assets, said China’s Supreme People’s Court (SPC) and the National Development and Reform Commission (NDRC).
The highest judicial organ SPC, jointly with the top economic planner NDRC of the country, on Wednesday issued a directive aimed at accelerating the improvement of the socialist market economy in the new era, in which new types of property including bitcoin-like digital currencies are particularly mentioned.
“(We will) strengthen the protection of new types of property such as digital currency, online virtual assets, data, etc, to give full play to the value-leading role of judicial organ in property rights protection.”
China has early banned Initial Coin Offerings (ICOs) and cryptocurrency trading in 2017. Since then, regulatory hurdles around the virtual property of cryptocurrency like bitcoin have been existing.
Regulators in China have previously defined bitcoin-like cryptocurrency as a virtual commodity with no clear legal status, which led to local courts having inconsistent rulings when disputes involving cryptocurrencies arise due to its ambiguous legal status.
The statement of the highest judicial organ marks that cryptocurrency has been officially recognized as a legal property and shall be entitled to protection just like equity assets such as stocks and funds under the law in China.
It may further bring in corresponding judicial interpretations and publishing guiding cases regarding cryptocurrency from the top judicial organ.
The development is a major step towards the legitimization of bitcoin and other cryptocurrencies in the country which has been largely hostile towards the cryptocurrency sector.
Despite the small victory, a ban that prohibits cryptocurrency trading is still in place, and protecting cryptocurrency by no means indicates condoning illegal activities like crypto scams, money laundering via cryptocurrency, and others.