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China Bitcoin Ban? no. The era of shortsightedness and recklessness in the Chinese economy is over. A Shanghai court has issued a surprise ruling that gives cryptocurrency holders legal peace of mind, declaring that owning cryptocurrencies is not illegal under Chinese law.
Sun Jie, a judge at the Shanghai Song People’s Court, explained this in a statement posted on the WeChat account of the Shanghai Higher People’s Court. Takeout? Citizens can legally hold cryptocurrencies as personal property, but companies cannot invest in or issue tokens without strict supervision.
There are only 11 countries whose GDP is higher than the value of Bitcoin. Soon there will be only seven countries left. At the peak of this cycle, there are likely to be only two countries with larger economies than Bitcoin: China and the United States.
— Francis – BULLBITCOIN.COM (@francispouliot_) November 21, 2024
The statement comes in the context of a dispute surrounding ICOs, which have been labeled as illegal financing under China’s hard-line policies.
Beijing still views cryptocurrencies as a financial grenade and is banning related business activities outright to avoid economic chaos. Cryptocurrencies may retain private property rights, but using them commercially or as a means of payment for illegal transactions is still prohibited.
Owning cryptocurrency is not illegal in China, judge says.
Judge Sun Jie of the Shanghai Song People’s Court provided the first legal clarity in years on cryptocurrency ownership. Sun wrote on the official WeChat account of the Shanghai Higher People’s Court, stating that private ownership of cryptocurrencies does not violate Chinese law.
“It is not illegal for individuals to hold cryptocurrencies,” Judge Sun emphasized, adding that the government was mainly targeting speculative trading activities and attempts to ensure financial stability.
The revelations emerged in a lawsuit involving two companies over initial coin offerings (ICOs), which China considers illegal. Cryptocurrency trading and mining are still prohibited, but this new view from the Shanghai court signals a subtle yet important difference between owning digital assets and actively trading them.
China’s crackdown began in 2017 with a ban on ICOs and the closure of exchanges, and accelerated in 2021 with a ban on mining and a complete ban on cryptocurrency businesses.
However, reports show that individuals and institutions continue to engage through underground channels, often utilizing foreign exchange for trading.
Surprisingly, China still controls the majority of the world’s Bitcoin hashrate, which is completely contradictory considering the ban. Behind the scenes, investors and miners appear to be looking for ways to circumvent regulation without having to publicly defy regulators.
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The bigger picture after China’s Bitcoin ban
China’s influence on the cryptocurrency market extends far beyond its borders. Despite the ban on domestic transactions, the country’s mining dominance contributes significantly to the Bitcoin ecosystem.
With Bitcoin currently hitting record highs globally, the growing demand for the digital asset, even within China’s borders, is hard to ignore.
For investors and industry leaders, this nuanced explanation offers cautious optimism. Although trading remains prohibited, legal verification of ownership could spark discussions about reassessing China’s strict policies in line with global adoption trends.
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Final Thoughts on China’s Bitcoin Reversal
By distinguishing between holdings and trading, China could represent a more pragmatic approach to digital assets.
Although it is still a long way from lifting its cryptocurrency ban, China may be one step closer to recognizing the undeniable impact blockchain technology will have on its future economy.
Currently, the global cryptocurrency community is closely watching China’s policy changes, which could have a significant impact on the market.
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Disclaimer: Cryptocurrencies are a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You may lose all your capital.
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