April 17, 2024

Court In China Vetoes Digital Assets As Legal Tender But Authorizes Trading 

A court in China has decreed that crypto traders are now permitted to continue with trading activities. The news came after China outlawed services on digital assets due to their level of volatility. Although exchanges within its bastion remain restricted from offering crypto-related products. 

China Allows Crypto Trading

Beijing’s court of the people aired out to Investors that they can now go ahead to trade virtual assets. But, there was a condition applied. The term was that it must never be considered an alternative to actual cash.

The charge stemmed from a court case from an incident in 2015. The same year, Zhai Wenjie requested a crypto loan from his friend Ding Hao. According to the story, the loan involved 50,000 Litecoin, which was to be repaid monthly with 1000 LTC interest. But the accused negated the claim due to a lack of evidence. 

The adjudicator on the matter declared that cryptocurrency is not legal tender. Also, it does not possess the qualities of the Chinese Yuan, such as legal backing. Therefore, It has no financial structure as indicated by the government, so it is unacceptable as a settlement of a debt. 

Furthermore, he reiterated that there is an existing line on digital assets, especially Bitcoin, in China. Therefore, Chinese citizens cannot make transactions involving payment for services or goods using Bitcoin or related instruments. However, since there is no such ruling against Litecoin, the sued must pay his dues to the suer.

It is worth noting that China specifically mentioned Bitcoin while banning crypto usage. Due to this, Litecoin could scale, and the prosecutor could win the case. Otherwise, the regulation would have favored the accused in lieu. 

China’s Position On Digital Currency

Moving forward, while the court noted the absence of interdiction on Litecoin, another had a different view on USDT. After China placed an embargo on using crypto-assets, a Chaoyang court raised a similar ruling on firms remunerating their workers with Tether. These companies which paid their workers’ salaries in USDT were requested to stop by the court.

Apart from the Beijing and Chaoyang courts, several others in different states also sanctioned similar regulations on crypto. Some regional courts instantly barred trading crypto from the moment the country tabooed it. However, there are still some regions with different perspectives on virtual assets.

An example is the stand of a court in Shanghai. Finbold disclosed in May that Shanghai High, the people’s court of Justice, claimed that Bitcoin possesses an economic worth and has backing from Chinese authorities.

Finbold further revealed that China is among the top ten countries dealing with digital assets. And regardless of existing restrictions, crypto trading continues to expand among the Chinese. According to data published recently, a rising number of people still trade virtual currencies under constraints.

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