Key Points
- A Shanghai court confirmed personal cryptocurrency ownership is legal in China.
- China still dominates over 50% of the global Bitcoin hash rate despite regulatory changes.
A Shanghai court has confirmed that owning cryptocurrencies doesn’t infringe Chinese law, a significant move offering legal assurance to crypto owners in mainland China.
The announcement coincided with a significant surge in Bitcoin’s price, approaching the $100K mark, which further fuelled ongoing speculations.
Judge Sun Jie’s Clarification
Judge Sun Jie of the Shanghai Songjiang People’s Court provided legal clarity for cryptocurrency holders in mainland China. In a statement published on the Shanghai High People’s Court’s official WeChat account, Sun stated, “Not illegal for individuals to hold cryptocurrency.”
Despite the 2021 ban on cryptocurrency transactions, the ruling offered a significant legal distinction. It confirmed that personal possession of digital assets doesn’t infringe Chinese law, even though regulatory restrictions on crypto trading are still in place.
Sun explained the difference between owning and transacting in cryptocurrencies and highlighted the ongoing crackdown on speculative activities in cryptocurrency trading.
China’s Cryptocurrency History
In 2021, the Chinese government banned cryptocurrency trading and Bitcoin mining after a surge in Bitcoin’s price led to a market correction. Despite this, Chinese citizens continued to hold cryptocurrencies and used foreign exchanges for transactions.
China still controls more than 50% of the global Bitcoin hash rate, dominating mining operations. Chinese investors are finding alternative ways to engage in crypto, prompting questions about China’s long-term strategy.
Former Vice Minister of Finance Zhu Guangyao recently called for the government to reassess its stance on cryptocurrencies. This reflects the complexities surrounding China’s position as global trends and policies evolve.
Eliézer Ndinga, Vice President at 21Shares, clarified that the legal stance in China has remained consistent. Individuals have always been allowed to hold cryptocurrencies, but commercial crypto activities, including trading and mining, have been prohibited for some time.