Although Mining and trading with Bitcoin in China is prohibited, this measure does not extend to possessing that currency. The latter was recently determined by the Shanghai Court in a decision that raises hopes for a possible lifting of the ban.
In 2021, the authorities of the Asian country carried out a campaign to dismantle all businesses related to cryptocurrencies. This caused a massive migration of miners from that country to other countries, mainly to the United States. Likewise, any type of commerce that involves digital currencies was banned.
The ban was accompanied by serious warnings of serious penalties for violators. However, it recently became known that not everything related to cryptocurrencies is illegal. According to a report from the South China Morning Post, Shanghai judicial authorities determined that having BTC in possession does not violate the laws.
In that sense, the Court considers that owning Bitcoin in China is similar to owning any other type of financial asset. It is important to keep in mind that Chinese citizens never stopped trading cryptocurrencies. Thus, traders turned to foreign exchanges to continue trading.
The same can be said of digital mining. Despite the ban, a large number of miners went underground. Consequently, China remains one of the global epicenters of digital mining, although this time as an illegal business.
Bitcoin is not an illegal asset in China
To understand the complex legal context of cryptocurrencies in China, it is worth noting that the trade continues illegally. In this way, using these digital currencies to buy and sell products or obtain benefits is penalized. However, possessing them is not illegal.
The decision of the authorities of the communist country to combat crypto trading has to do with control. The country has been preparing for a decade to launch its own CBDC or central bank digital currency. At this point, the authorities will not allow financial competition from decentralized or private currencies.
Hence, the ban has the objective of tightening the control fence against the financial freedom of its citizens. The country’s officials assure that trading in cryptocurrencies constitutes a danger to the stability of the financial market. However, the example of incorporation in the United States seems to disprove this assumption.
In any case, citizens at least have hope that one day they will be able to convert their accumulated coins into money legally. Owning Bitcoin is not a crime in China, according to Judge Sun Jie of the Shanghai People’s Court. Despite this, there is no legal way to buy cryptocurrencies, which is contradictory.
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