China hasn’t always been friendly toward cryptocurrencies. However, according to the Beijing Arbitration Commission, the country hasn’t outright banned Bitcoin either.
China’s Evolving Regulatory Landscape
In 2017, China imposed a domestic ban on Bitcoin trading, but this didn’t stop ICOs and virtual currency transactions. With no operational Bitcoin exchanges in China, traders turned to foreign exchanges for cryptocurrency transactions. Due to regulatory pressure, Binance—one of the world’s largest crypto exchanges—had to leave China.
At the start of 2018, the People’s Bank of China required financial institutions to halt banking services or funding for any crypto-related activities. At the time, cryptocurrencies weren’t recognized as legal tender. Later that year, the Shenzhen Arbitration Committee noted that crypto assets should be protected under China’s property ownership laws.
Bitcoin Recognized as Virtual Property
On July 18, 2019, a property dispute involving Bitcoin was heard in the Hangzhou Internet Court, which ruled that Bitcoin qualifies as virtual property with monetary value—setting a new legal precedent.
Pang Lipeng, one of the case’s lawyers, stated:
"This was the first time Bitcoin was recognized as a valuable, scarce, and usable asset under Chinese law."
The court affirmed that owning cryptocurrencies remains legal in China and should be protected under property rights. The central bank clarified:
"Bitcoin is virtual property, but not legal tender."
Despite government restrictions, the Beijing Arbitration Commission also ruled:
"The same law that prohibits cryptocurrencies as money also defines Bitcoin as a virtual commodity."
Cryptocurrencies and Property Rights Under Chinese Law
Earlier this year, China passed a new Civil Code during the 13th National People’s Congress, strengthening protections for inheritance, marriage, property, and contractual rights.
Professor Yang Lixin of Renmin University explained:
"The Civil Code states that inheritance includes ‘lawful personal property,’ which now extends to virtual assets like cryptocurrencies."
Starting January 1, 2021, Chinese citizens can legally pass down their crypto holdings to heirs.
Blockchain Over Cryptocurrencies
China has actively promoted blockchain technology while maintaining skepticism toward cryptocurrencies. The government recently released its first blue paper on blockchain applications in public services, highlighting 140 use cases across:
- Data sharing/exchange
- Business collaboration
- Digital certification storage
One key application is in real estate registration, involving 11 agencies, including urban planning, tax authorities, and financial regulators.
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FAQs
Q: Is Bitcoin legal in China?
A: Yes, but only as virtual property—not as legal tender. Ownership is protected under property laws.
Q: Can I trade Bitcoin in China?
A: Domestic exchanges are banned, but peer-to-peer and offshore trading persist.
Q: Does China recognize cryptocurrency inheritance?
A: Since 2021, virtual assets can be inherited under the Civil Code.
Q: How does China regulate blockchain?
A: While crypto faces restrictions, blockchain is encouraged for public-sector innovation.