China’s high court rules Bitcoin has economic value and is legally protected

China’s controversial cryptocurrency landscape has taken a new turn after the People’s High Court in Shanghai ruled that Bitcoin has “certain economic value” and is a virtual asset protected by the country’s laws.

In a notice published by the court on the WeChat messaging platform, Bitcoin has certain economic value and houses the relevant property attributes, bitcoin.com reports.

The decision is monumental given that China has banned cryptocurrencies like Bitcoin, citing a threat to the stability of the country’s financial sector.

“In the actual practice of the trial, the people’s court formed a unified opinion on the legal position of bitcoin and identified it as a virtual property Bitcoin has some economic value and depending on the attributes of ownership, the rule of property rights law is applied for protection,” the decision reads.

The court ruling is the first ruling on Bitcoin by the country’s legal system. Notably, the People’s High Court of China is the highest local court in the provinces. However, it is unclear whether other higher courts may take a similar stance on Bitcoin.

Impact of the decision

Commenting on the ruling, Liu Yang, a lawyer from Beijing, said the court’s directive would serve as an important point of reference for civil disputes related to Bitcoin in the Shanghai region.

Given the court ruling declaring that Bitcoin should receive legal protection, there will be keen interest in how crypto players and the government respond to the directive.

The ruling stems from an October 2020 case in which an individual identified as Cheng Mou filed a lawsuit with Shanghai Baoshan District People’s Court, demanding that a Shi Moumou return his only bitcoin.

However, the defendant failed to return the Bitcoin as ordered by the court in a February 2021 decision within the stipulated ten days.

Cheng decided to seek redress from the local court system in Shanghai, where the Baoshan court organized the mediation between the two parties.

China’s Eternal Crypto Opposition

Although China has a long history of opposing cryptocurrencies, last year’s directive to ban the trading and mining of cryptocurrencies was seen as significant after its impact on the general market.

The directive led to a massive correction in the crypto market, with miners moving to friendly jurisdictions. Notably, at the time, China had the largest number of Bitcoin miners in the world.

The government has argued that cryptocurrencies disrupt the economic order and can prevent the transmission of individual risk to society at large.

Since then, the government has issued crypto regulations to close any loopholes. One of the recent regulations banned the sharing of short crypto-related videos online. As reported by Finbold, the China Netcasting Services Association (CNSA) has updated its regulations prohibiting the sharing of videos promoting digital assets.