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A high court based in China’s Northern Shandong Province made its final judgment on a cryptocurrency case in 2017. According to the decision, digital currencies are not under the protection of any laws in China. This ruling gives a clear sign of how China plans on handling crypto-related cases in the future.
Details on the Case
In 2017, the Plaintiff dedicated a sum of 70,000 yuan to buy specific digital tokens. This investment comes after the Plaintiff followed recommendations made by friends. The People’s Bank of China then began blocking crypto transactions on various institutions. As a result, it led to the closure of the Plaintiff’s account along with the holdings.
Shandong’s Capital court made its official rule in January 2021, stating that the Plaintiff’s case is not defensible. According to the court, digital assets don’t have legal status in China, making the allegation insupportable.
The Plaintiff appealed back in March 2021, and upon review, Shandong’s court ruled that there are no laws shielding cryptocurrencies. Thus, the court’s verdict means that Chinese investors with crypto-related issues may not receive any legal support in case of loss.
Such occurrences create uncertainty for Chinese crypto investors. On top of that, these headlines bring an impact on the trillion-dollar crypto market.
China’s War on Crypto
China is becoming a strong opponent of cryptocurrencies as it outlaws digital assets. In March 2021, the country barred payment institutions from offering crypto services. The warning included crypto services such as registration, settlement, trading, and clearing.
Another ban began to take effect across five provinces in China. At this point, the government stopped crypto mining activities in those regions. This action follows China’s carbon neutrality policy which plans on lowering carbon emissions.
The government believes eliminating crypto mining activities prepares China for a carbon-neutral ecosystem.
As such, miners migrate to other regions, searching for better alternative mining posts. Thus, enforcing these directives slows down the growth and adoption of cryptocurrencies.
What Next?
China hopes to start a pilot program that aims at introducing users to the Digital Yuan. The country plans on launching its CBDC to individuals in the 2022 Beijing Winter Olympics.
Central banks from Hong Kong and Thailand are among the institutions supporting the Digital Yuan concept. As a result, the test program plans on moving the nation into a cashless economy.
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