- The People’s Court in China has approved crypto as legally-protected property, despite a ban by Beijing.
- In crypto-related crimes authorities cannot simply seize crypto assets because they are banned.
- Owners still enjoy individual property rights as funds involved cannot be seized.
China local media has reported a recent development in the crypto realm, marking a watershed moment for crypto holders in the country. According to the report, the People’s Court in China has declared, “Virtual currency is legal property and protected by law.” This comes despite Beijing’s ban of cryptocurrencies two years ago.
Also Read: Grayscale Bitcoin Trust to readjust fees if SEC approves its spot BTC ETF applications
China recognizes crypto as legal property
China’s court has classified cryptocurrencies as legal property, recognized under property law and rights. The announcement, was first featured in the Chinese People's Court Newspaper Article. This explores how the court defines the legality of digital assets in relation to criminal law.
Despite China banning cryptocurrencies and digital assets in 2021, the court determined that digital funds in crypto-related crimes cannot be “seized” since they enjoy the same legal status as other property. The article clarifies that the law should strike a balance between the interests of the “public and individual property rights.”
The development comes two years after Beijing banned cryptocurrencies, a detrimental move that sent mining firms out of the country, and flocking to the US.
That said, China has demonstrated more openness to blockchain in 2023, with Hong Kong taking the crypto-China narrative forward. This happened when the city’s Quan Securities launched a trading platform for related services.
Also Read: Bitcoin price dips 7% as SEC delays seven spot BTC ETF applications
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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