China's top court rules on Bitcoin

China's top court rules on Bitcoin

This week, the Shanghai High People s Court said thatBitcoin, the world's largest coin by market value, is a virtual property entitled to legal protections under Chinese law. The decision to ban cryptocurrencies last year shocked outsiders.

This is the first time that a top court in China has ruled onBitcoin.

In 2017 Beijing imposed a prohibition on cripto trading, which then moved to stopping miners, causing a massive exodus of mining to Kazakhstan and the United States.

According to the court,Bitcoin maintains a certain economic value and the digital asset conforms to virtual property's attributes. The court said the legal rules of property rights are applied for protection because of this situation.

The Shanghai Baoshan District People's Court was deciding on an October 2020 case about a Chinese citizen named Cheng Mou, who asked another individual named Shi Moumou to return a Bitcoin, which was offered as a loan. The court ruled last February that Moumou had to return the Bitcoins within a ten day period.

Moumou did not repay the loan, prompting the case to continue. The Chinese court sought assistance from the platform that originally ran the transaction, but there was no address for the court to use for the company that was registered overseas.

It was determined by the court that the digital asset was a virtual asset, given its ability to maintain value, scarcity and disposability. The digital assets had property rights and could be assessed as virtual property under the existing rules.

Despite the ban on virtual currency in China, the world's most populous country is aggressively pursuing the digital yuan, a central bank digital currency that was trialed during the Beijing Winter Olympics.