In a landmark ruling, the Shanghai High People’s Court has declared Bitcoin to be virtual property protected by Chinese law. The court outlined that Bitcoin has economic value and attributes that make it property.
According to Sina News, a local news outlet, the court made the statement in a case reference book it shared via its official WeChat account titled “Does Bitcoin Have Property? How to perform return delivery?”
The document references a case involving a Bitcoin loan agreement first filed back in 2020. Cheng Mou filed the lawsuit against Shi Moumou with the Shanghai Baoshan District People’s Court, seeking a 1 Bitcoin loan repayment.
The district court ruled that Moumou should repay the loan. On the defendant’s failure to comply, the district court brought the case before the high court for intermediation in 2021. The high court’s decision read:
“In the actual trial practice, the People’s Court has formed a unified opinion on the legal position of Bitcoin, and identified it as a virtual property.” Adding that Bitcoin “has a certain economic value and conforms to the property’s attributes, the legal rules of property rights are applied for protection.”
The high court ruled that the parties should negotiate a discounted compensation. This is because Bitcoin is currently banned from trading in China and has no reference price.
The kind of ruling is the first of its kind in China. As noted by the court document, the ruling will be used as a reference for other similar civil disputes involving Bitcoin in the Shanghai region.
China continues crackdown on digital currencies
Significantly, the finding is being published after a court in the Chinese city of Hangzhou ruled that an NFT marketplace was guilty of not preventing a copyright infringement. The case was the first recorded public ruling on NFTs in China.
Regardless, China still has a blanket ban in place for all blockchain and digital currency-related activities, including trading and block reward mining. The country continues to implement the ban with a crackdown on digital currency companies, block reward miners, exchanges, data aggregator websites, and even related social media accounts.
Meanwhile, the People’s Bank of China (PBoC) has become the first major economy to launch its central bank digital currency (CBDC). Bloomberg reports that China is the leader in the growing central bank exploration of digital currency globally, having conducted several mass tests of their e-CNY.
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