What is the use of Bitcoin in China (Is Bitcoin considered legal property in China)?

What is the use of Bitcoin in China? According to Bitcoinist news, there has been discussion about the use of Bitcoin in China.

It is reported that the total supply of Bitcoin is 21 million; Satoshi Nakamoto created the first version of Bitcoin and used the SHA256 algorithm to ensure transaction security. In the first batch of block producers, the hash value is used to mine about 10 transactions per second, which means each miner can mine over 100 blocks. The second batch of forked coins was developed by the “New World” team, including a new project called the Blockchain Ecosystem.

Is Bitcoin considered legal property in China?

According to Chinese law, Bitcoin is considered virtual property. If it does not have legal status within China or belongs to any other country or entity, then it is not considered property. However, the main entity purchasing Bitcoin outside of China is the People’s Bank of China, but due to personal reasons, they cannot hold it, so it does not possess the legal status or monetary characteristics. Therefore, whether Bitcoin can be considered as legal property in the United States is still to be observed and considered. However, currently, the legal regulations regarding Bitcoin in China are relatively lenient. For example, the United States Internal Revenue Service (IRS) imposes a 10% value-added tax on cryptocurrency traders. For domestic investors, this means that the general public may find it easier to convert digital currency into Chinese yuan for investment purposes. (Phoenix Finance)

So, in China, how can Bitcoin be a viable investment tool and how are its legal rights protected? Let’s take a closer look at the specific regulatory policies: (1) The current Article 6 of the Civil Code of the People’s Republic of China stipulates that “property rights” refer to the act of issuing, managing, using, and circulating intangible cultural heritage in the name of trustee in the people’s court. (Tencent News) (2) According to relevant regulations, whether it is commercially regarded as a commodity or a security, it should be classified under specific individuals, legal persons, or public organizations and abide by the obligations stipulated by national laws and regulations. (3) According to the requirements of the State Council regarding the formulation of the Fourteenth Five-Year Plan for National Economic and Social Development and the Vision Goals for 2034, the General Principles of the Civil Law of the People’s Republic of China (also known as the “Opinions,” including regulations and measures) cover the terms “property” and “wealth.” This means that “loans,” “deposits,” “credit,” that is, ways to obtain income through various forms, must be chosen by the public and registered according to certain conditions. “Loans” refer to loans provided by financial institutions to borrowers with interest payments. In addition, the “guarantee” also applies to the execution of “contracts.”

As mentioned in the above article, these clauses are effectively explaining why in China, people consider Bitcoin to be a legal property, and it can still be freely bought, sold, and transferred in the market, and over time, this value may become more stable and transparent. The content listed in the “Restriction Order” is very detailed: 1. Private companies are prohibited from engaging in token financing activities because their purpose is not to raise capital through the fundraising but to make it a new type of economic activity with the help of third-party intermediaries in providing services or technological support, rather than a new business; 2. Encourage the innovative application and development of blockchain technology, such as establishing a network system based on smart contracts that allows developers to write code without trust, thereby improving efficiency.