China has lifted its ban and restrictions on Bitcoin. The country has banned the cryptocurrency at least six times, and Bitcoin has appreciated 350% since the last time it was banned in September 2021. Now, nearing the $100,000 mark, China has backtracked again and recognized the asset as a true digital asset.
Despite China being one of the biggest Bitcoin whales, the last time it banned Bitcoin was in September 2021, when the Central Bank of China declared all cryptocurrency transactions illegal. At the time, Bitcoin was worth an average of $20,000, having appreciated by more than 350% since this latest surge.
However, it is worth mentioning that despite constantly banning the technology, the Chinese government has more than 100,000 BTC in its custody, resulting from seizures. Thus, the turnaround happened on the 18th, in a decision by China's High Court on the issuance of tokens (ICOs). In the document, the classification of Bitcoin as a “commodity” was made clear.
China declares Bitcoin not illegal
The case refers to the dispute between two companies that together planned to launch their own token in 2017. The ending was not happy for the company, as ICOs have remained prohibited since the beginning of the case.
“After analysis, the court considered that the issuance of tokens for financing, through the unauthorized sale and circulation of digital tokens, is an illegal practice of raising funds,”
However, the legal basis for the decision was what drew attention. Subsequently, the decision concluded that “digital currencies, such as Bitcoin, are not prohibited by law”. In the view of Chinese journalist Colin Wu, it is a clear indication of the country's legal evolution regarding the industry.
“China’s Shanghai High Court has ruled that virtual currency, as a virtual commodity, has property attributes and is not prohibited by Chinese law. However, trading activities related to virtual currency are strictly restricted, and Chinese laws and regulations have always maintained a high-pressure crackdown on speculation activities in virtual currency trading,” he wrote on his X profile, formerly Twitter.