China's relationship with cryptocurrency has been complex, marked by cautious regulatory approaches rather than outright hostility. Recent clarifications from authoritative bodies shed light on the legal status of digital assets like Bitcoin within the country's financial ecosystem.
The Evolution of Bitcoin's Legal Status in China
- 2017: China prohibited domestic Bitcoin trading, forcing exchanges to cease operations. Traders migrated to foreign platforms to continue crypto transactions.
- 2018: The People's Bank of China (PBoC) instructed financial institutions to halt services for crypto-related activities, though cryptocurrencies weren't classified as legal tender.
- 2019: A landmark ruling by the Hangzhou Internet Court recognized Bitcoin as "virtual property with monetary value", establishing its status as a protected asset under Chinese law.
Key Legal Interpretations
- Beijing Arbitration Commission: Confirmed that while using Bitcoin as currency is prohibited, its role as a virtual commodity remains legal.
- Shenzhen Court of International Arbitration: Upheld transactions involving Bitcoin returns, emphasizing its classification as ordinary property when not functioning as money.
Cryptocurrency and Property Rights Under China’s Civil Code
The newly enacted Civil Code (effective January 1, 2021) expands protections for digital assets:
- Inheritance Rights: Citizens can bequeath cryptocurrencies and virtual property to heirs.
- Property Classification: Virtual currencies fall under "internet property", provided they’re lawfully acquired.
"Bitcoin is virtual property, not fiat currency."
— People’s Bank of China
Blockchain Adoption: A Strategic Priority
China continues to advance blockchain technology for government and enterprise use, despite its cautious stance toward cryptocurrencies:
Key Applications (2023)
- Data Sharing: 140+ government services now use blockchain for inter-departmental efficiency.
- Document Authentication: Electronic certificates stored on-chain enhance verification speed and trust.
- Real Estate Systems: Streamlining operations across 11 agencies, including tax bureaus and banks.
👉 Explore how blockchain transforms governance
FAQs: Understanding China’s Crypto Policies
Q1: Can I legally own Bitcoin in China?
Yes, as virtual property—but trading it as currency is prohibited.
Q2: Does China recognize cryptocurrency inheritance?
Absolutely. The Civil Code explicitly includes digital assets in inheritances.
Q3: Why promote blockchain but restrict crypto?
Blockchain’s utility in governance and industry aligns with national goals, whereas cryptocurrencies pose financial stability risks.
Q4: Are mining activities allowed?
Currently, Bitcoin mining is banned due to energy consumption concerns.
👉 Learn about global crypto regulations
This analysis synthesizes reports from the Beijing Arbitration Commission, PBoC, and Blockchain.News.