Shanghai’s district court has ruled in favor of a holder’s right to compensation. It acknowledged that Bitcoin is subjected to laws and regulations. This ruling is related to an October 2020 lawsuit in which the accused sought repayment of 1 BTC loans. The Shanghai High People’s Court recognized 1 BTC as having value and disposability, and as such the loan provider does have legal right to reimbursement.

BREAKING: Shanghai High People’s Court has declared #Bitcoin is a legal virtual property protected under Chinese law.

— Watcher.Guru (@WatcherGuru) May 12, 2022

China’s First-ever Ruling on Bitcoin as an Asset with Economic Value

This particular case at Shanghai’s district court is historic, given the circumstances, especially when considering that China had previously levied an official ban on cryptocurrencies, citing concerns of destabilization to the country’s financial sector.

In favor of Cheng Mou the court decided and Shi Moumou is legally obligated to return BTC. It will be difficult because Bitcoin trading is not legal in China. The parties involved have reached a settlement, in which the defendant must pay compensation for the BTC loan.

The Meaning of Crypto Law

Even though China’s ‘High People’s Court’ stands as the top provincial court, it is unclear if courts of higher authority will be as keen to adopt a similar outlook on BTC.

Beijing lawyer Liu Yang has described the ruling by the court as a “significant point of reference for Bitcoin-related civil disputes”, but was unsure as to what extent it would impact the current climate. The Chinese government is opposed to cryptocurrency. Since 2017, efforts have been made to reduce the usage of crypto in China. Eventually, the Chinese government gradually cut the nation’s crypto miners off from the power supply, and similar policies are now seemingly targeting NFTs.

There is also competition between China’s native digital currency, the digital yuan, and cryptocurrencies. The digital yuan has already seen popular use at the Beijing Winter Olympics 2022, and it appears that China’s CBDC is being rapidly adopted amongst Chinese citizens, due to its use in purchasing public transport tickets. According to some reports, more than 80 countries have started working toward a national CBDC. China is currently setting the tempo, thus painting a bright picture for the future of the digital yuan in place of crypto in the world’s second biggest economy.

Only China and nine other countries had started piloting digital currency central banks (CBDC) as of mid 2020. The development of a CBDC is lagging behind most major economies including the United States. Learn more: https://t.co/kn7zSd0oaE pic.twitter.com/aUeu1ninzx

— ChinaPower (@ChinaPowerCSIS) May 12, 2022

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