Supreme Court of China Approves Use Of Cryptocurrencies To Settle Debts
China’s Supreme Court has recently released guidelines recognizing the legal use of cryptocurrencies in settling debts, provided both parties agree.
This is a significant update to the country’s existing blanket ban on digital assets. The court also clarified that if one party agrees to transfer cryptocurrencies to another, but the receiving party cannot fulfill their end of the deal due to policy restrictions, the court will determine the compensation based on the actual value of the property accepted by the receiving party at the time of signing the contract
This ruling is a major step forward for the cryptocurrency industry in China and could have far-reaching implications for investors and businesses.
However, it is important to note that China remains concerned about the risks of crypto, and officials in China have drafted a proposal for protocols on how to deal with crypto-related financial trials.
The draft opens by stating that “the trading hype activities of bitcoin, ethereum, usdt and other virtual currencies seriously disturbed the economic and financial order and seriously jeopardized the property safety of the people.
What are the guidelines released by China’s Supreme Court regarding the use of cryptocurrencies
China’s Supreme Court has released guidelines regarding cryptocurrency-related disputes.
The guidelines state that settling a debt using a small amount of digital assets would be considered legal if both parties agree.
However, it is important to note that the guidelines do not necessarily indicate that the government now recognizes the legal status of cryptocurrencies.
In addition, the guidelines declared all crypto transactions illegal in mainland China and prohibited foreign crypto exchanges from offering any of their services to Chinese residents.
Despite this, the Beijing Number One Intermediate People’s Court ruled that citizens can still trade cryptocurrencies despite the ban, but only as virtual assets and not as a currency.
What is the legal status of crypto in China after the new guidelines
The legal status of cryptocurrencies in China remains unclear after the release of the new guidelines by the Supreme Court.
While the guidelines recognize the legal use of cryptocurrencies in settling debts, they do not necessarily indicate that the government now recognizes the legal status of cryptocurrencies.
In addition, the guidelines declared all crypto transactions illegal in mainland China and prohibited foreign crypto exchanges from offering any of their services to Chinese residents.
Furthermore, the Chinese Supreme Court revised its judicial interpretation for illegal fundraising to include digital currency transactions, which means that those found illegally raising funds from the public in the name of digital currencies would be punishable under the newly revised law.
Therefore, it is important to note that the legal status of cryptocurrencies in China is still subject to strict regulations and restrictions.
