A local non-profit arbitration organization says that China, one of the world's most stringent jurisdictions for cryptocurrency trading, has not completely ban Bitcoin (BTC).
China's ban on bitcoin is more accurate than anyone could imagine, according to the July 30 report by the Beijing Arbitration Committee (BAC).
Bitcoin is not money in China
In the report, the EAC clarified China's legal position on cryptocurrencies such as bitcoin and outlined the main activities related to cryptocurrencies banned by the government.
According to the BAC, China prohibits the exchange of financial codes and trading platforms between legal bid and virtual currency or tokens.
Then the committee states that the same law that prohibits cryptocurrency like money is recognized as a default good.
Additionally, according to the BAC, current laws are not specific enough to regulate Bitcoin as default property:
The general principles of civil law do not contain specific provisions regarding the expansion and meaning of virtual property, but only stipulate that the protection of virtual property must be provided for by law, and leave specific measures to protect virtual property in appreciation of other laws. Since the country currently does not have Bitcoin laws, it cannot be considered virtual ownership. ”
The message says, “Consequently, the government does not prohibit Bitcoin activity as a virtual commodity, except for activities in which Bitcoin participates as a legal currency.”
Since Bitcoin does not represent funds in China – since the government has not approved Bitcoin as a legal tender – and since Bitcoin is not used as a substitute for legal tender or paper currency, it should not be associated with an illegal transaction, BAC said. :
“Banned transactions include transactions in which bitcoin is used as a currency. If bitcoin is not involved in any activity such as the currency, it is not a prohibited transaction by the government. For example, a dispute over capital transfer was settled by the International Arbitration Court in Shenzhen, The parties have agreed to return Bitcoin. Bitcoin is used only as joint property. Therefore, the transaction does not violate relevant national regulations and should be valid. ”
Mixed in the back of Bitcoin, but at full speed advanced blockchain technology
China has become one of the most stringent countries when it comes to cryptocurrencies after the introduction of regulations on domestic cryptocurrency exchange in 2017. Because of these rules, the world's largest cryptocurrency exchange platform, originally founded in China, was forced to leave the country.
However, despite the move towards stricter regulation of bitcoin, China has not banned the cryptocurrency directly. In November 2019, the Chinese authorities stated that Bitcoin mining would not be an illegal industry in the country.
The Chinese government is known for its ‘blockchain, not bitcoin’ approach when President Xi Jinping asked the country to prioritize blockchain development at the end of 2019.
In addition to vigorously developing blockchain as China's national blockchain service network, the Chinese central bank has made progress in creating a central bank digital currency. In April 2020, China piloted a successful project in four cities including Shenzhen, Chengdu, Suzhou and Xungang.