China’s evolving cryptocurrency sector has recently taken a new turn with the release of guidelines by the country’s Supreme Court.
Despite the blanket ban on digital assets, settling a debt using a small number of cryptocurrencies is now considered legal if both parties agree, according to Wu Blockchain.
The court clarified that if a small amount of virtual currency is used to compensate for debts arising from the mutual exchange, labor service, and other basic relations, the contract will be recognized as valid if there are no other invalid causes.
While this development underscores China’s shifting stance on digital assets, it also highlights the confusion around its stance.
Despite outlawing cryptocurrencies, the Beijing Number One Intermediate People’s Court ruled in 2022 that citizens can still trade cryptocurrencies, provided they treat them as virtual assets and not as currency.
The recent Supreme Court guidelines do not necessarily indicate a change in the government’s stance on digital assets. However, they do show that China is acknowledging the growing interest in cryptocurrencies.
The country has even implemented a 20% personal income tax on investment profits for individual cryptocurrency investors and Bitcoin miners.
This latest development is significant for cryptocurrency investors in China, who now have more clarity on the legal status of cryptocurrencies in the country.
However, the government’s conflicting stance on digital assets means that investors must remain vigilant and keep track of any new developments in the sector.