The use of cryptocurrencies as a means of payment is still illegal

Beijing People’s Court allows citizens to trade in digital assets

16.09.2022 - 12:00

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2 min

What’s new? The Beijing Number One Intermediate People’s Court has ruled that locals are allowed to trade in cryptocurrencies, while their use as a means of payment or as a substitute for money remains illegal. The ruling comes after Zhai Wenjie v. Ding Hao — the plaintiff had lent the defendant 50 000 Litecoin (LTC) with an obligation to pay interest but never received the assets back. The court noted the PRC’s ban on the use of cryptocurrency as a means of payment but concluded that LTC could not be considered as a currency because it was not issued by a monetary regulator and was not supported by a legal and financial framework that supports fiat.

Statement on the Beijing court’s website

What else is known about the ruling? According to the ruling, China has no law prohibiting cryptocurrency from being considered a virtual asset. Thus, it is legal to own and trade cryptocurrencies in the country, with property laws to be applied to this type of asset.

What happened before? The National Copyright Administration of China (NCAC) will tighten its supervision of NFTs. The local regulator intends to crack down on the illegal use of other people’s works of art to create non-fungible tokens.

The People’s Bank of China called for better integration between the digital yuan (e-CNY) system and traditional electronic payment instruments. The regulator argues that this would improve convenience for e-CNY users.

In June, the Shanghai Fengxian Court invalidated a car sale using cryptocurrency that took place in 2019. Mr. Huang signed a sales contract with an unnamed car dealership for an Audi AL6 for Unihash (UNIH) tokens but did not receive the car within the specified period.

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