- China did not ban Bitcoin-related activities completely
- China recognizes Bitcoin as a virtual commodity
- The Chinese government is more focused on blockchain technology, not Bitcoin
Bitcoin News Today – Bitcoin (BTC) is functioning as a virtual commodity in China, as the Chinese government did not completely ban Bitcoin-related activities. China is one of the strictest jurisdictions in the world for digital currency trading, and a local non-profit arbitration organization just pointed out that China has not completely banned the digital currency.
The organization – Beijing Arbitration Commission – recently published a report that shows that the ban of Bitcoin by the Chinese government is more nuanced than some have suggested.
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Bitcoin Is Not Completely Prohibited in China; It Is Recognized as a Virtual Commodity
According to the report by BAC, the Chinese government bans token funding and exchanges from getting involved in trading between the fiat currency and tokens of digital currencies. The organization pointed out that the same law that bans digital currency as money also recognizes it as a virtual commodity. According to the BAC, existing laws are not specific enough to regulate BTC as virtual property:
“The “General Principles of Civil Law” do not make specific provisions on the extension and connotation of virtual property, but only stipulates that the protection of virtual property must be stipulated by law, and the specific protection measures of virtual property are entrusted to other laws. As the country currently has no laws on Bitcoin, it cannot be recognized as a virtual property.”
The BAC said:
“The prohibited transactions include those when Bitcoin is used as a currency. If Bitcoin does not engage in activities as a currency, it is not a transaction prohibited by the state. For example, in the equity transfer contract dispute decided by the Shenzhen International Arbitration Court, the two parties agreed on the return of Bitcoin. Bitcoin is only used as a general property. Therefore, the transaction does not violate relevant national regulations and should be valid.”
China Accepts Blockchain with Open Hands, not Bitcoin
China is known as the strictest country in the world in terms of digital currency after regulations on digital currency trading platforms in the country back in 2017. Binance, the largest digital currency trading platform in the world, was originally established in China. However, the company had to move due to the regulations of the country.
Nevertheless, the Chinese government has not prohibited Bitcoin outright. The government is known for its “blockchain technology, not Bitcoin” approach. In late 2019, the President of China called on the country to prioritize blockchain development. The central bank of China is also working on its central bank digital currency, alongside the development of China’s National Blockchain Service Network.