Official: in China it is legal to own Bitcoin

A Shanghai court has officially declared that in China it is legal to own Bitcoin and cryptocurrencies, and that these have all the characteristics to be considered property assets.

The South China Morning Post reported it yesterday, with an article dedicated to the matter.

Bitcoin è legale in Cina

In 2021 the Chinese government issued a ban that affected not only Bitcoin mining, but also the trading of cryptocurrencies.

The ban was issued in May, after the price of Bitcoin had risen to $64,000, and suddenly caused the disappearance of Chinese capital from the crypto markets, declared effectively illegal in China.

The price of Bitcoin plummeted to $30,000 within a month, but by the end of the year, it bounced back to record what was then the all-time high at $69,000. 

However, the Chinese never stopped owning cryptocurrencies, and indeed after a while they started buying and selling them again using foreign exchanges. 

The ban is still officially in place, but the Shanghai court has stated that by law it is at least permitted to own them. 

So Bitcoin is actually legal in China, it’s just that it wouldn’t be legal to buy or sell it. 

The opinion of the judge: in China it is legal to own Bitcoin

The South China Morning Post cited an article written by judge Sun Jie of the Shanghai Songjiang People’s Court, published this week on the official WeChat account of the Shanghai High People’s Court.

In that article Sun Jie explicitly wrote that in China it cannot be considered illegal for individuals to hold cryptocurrencies.

However, Chinese commercial entities are not allowed to participate in investments in cryptocurrencies or the issuance of tokens “at will”. 

The article by the judge contained comments on a case for a recent lawsuit that involved disputes between two companies over an initial coin offering (ICO), considered illegal financing in China.

However, the South China Morning Post also adds that China believes cryptocurrencies pose a threat to financial stability, therefore it continues to consider commercial activities related to these assets illegal, at least in mainland China. 

The crypto landscape in Hong Kong

In Hong Kong, however, things are different. 

Hong Kong is an island, and technically it is not part of mainland China, even though it is effectively bordering the city of Shenzhen.

From a political point of view, it is a special administrative region of the People’s Republic of China, so it is fully part of China even though it has some of its own laws. 

The fact is that in Hong Kong, it is legal to buy and sell cryptocurrencies, so much so that on its stock exchange, ETFs on both Bitcoin and Ethereum spot have been officially authorized. 

Hong Kong is often used by China as a special territory to act as a trailblazer for new initiatives to be tested, so there is a possibility that the Chinese government is considering removing the crypto ban. 

Probably much will depend on what happens during the current bullrun, even if it seems really unlikely that at this moment China wants to pull out of the crypto markets again, also forcing the Hong Kong stock exchange to do so. 

The problemi della valuta digitale cinese

After banning cryptocurrencies, China in recent years issued its own digital currency. 

However, it is only the natively digital version of its fiat currency, the yuan, so in every way similar to the classic national currency, just in a different technical format. 

The digital yuan, however, has never really taken off, despite being usable as a complete alternative to the classic one, perhaps because all its transactions are under the control of their central bank.

Indeed, the former head of this project was also accused of corruption and expelled from the Chinese Communist Party with charges of accepting bribes.

ThePaper.cn reports that Yao Qian abused his powers and illegally accepted valuable gifts to turn a blind eye to the illegal behavior of some currency users.

This speaks volumes about how unreliable a centralized currency can be, even if it is based on a distributed ledger. All this would simply be impossible on a true decentralized cryptocurrency, like Bitcoin, in whose ecosystem no one has, and will ever have, such powers. 

At this point, many expect China to admit its mistakes and lift the ban on cryptocurrencies.