It was in the year 2019, when the President and General Secretary of China called to embrace the world of blockchain and NFT to increase the country’s investment and focusing on the present development of the said blockchain technologies.
The people of China are expected to become the very first central bank for creating a legally sanctioned and official digital currency. It is a government-backed version of the digital fiat currency. Below highlighted is a comprehensive overview of Bitcoin trading in China. Read on to know more in detail!
- In the year 2020, Chinese government released a report that presents blockchain application blueprint with some respect to the current governmental services.
- Being the Standing Committee of the 13th National People, the Congress later enacted cryptography laws to be effective in 2020. This law works together with the current PRC cybersecurity law.
- The Chinese government expanded the “Civil Code of the People’s Republic of China” in 2020 to include the inheritance of virtual assets. This means that virtual assets, such as Bitcoin, can now be included in a person’s will and passed on to their heirs after their death.
More on the available changes as made:
The cyberspace Administration of China will be working on “Provisions on the Administration of Blockchain Information Services,” which will be working on the China’s internet section and will govern the blockchain information services.
- The blockchain system is well associated with the “Encryption Law of the People’s Republic of China.” that helps in governing the encryption productions along with the given standards now.
- The Chinese government actually banned the ICOs in 2017 and ordered for that closure of the current exchange platform.
- Even after this banned was in place, it was not illegal for the people of China to hold cryptocurrency under their names. Later, in 2020 October, the People’s Bank of China created draft law and offering legal status to digital Yuan, which is the central bank’s digital currency.
The legal basis to follow in China:
As per the latest statistics, China will not recognize cryptocurrency as one legal tender. On the other hand, the banking system is not currently accepting cryptocurrency or offering some relevant services. Right from 2013, the government has issued some regulations, which are aiming to restrict the trade of the cryptocurrency and any activity related to the virtual currency. The main goal was to improve the investor protection and financial risk prevention category.
- The domestic versions of the cryptocurrency platforms along with the ICO or Initial Coin Offering were also banned. Any event related to cryptocurrency or ICO was highly discouraged at that time.
- At present, China has not passed any form of legislation to regulate cryptocurrency but in 2013 circular, Bitcoin was stated as one official perspective on how the Chinese government is working with cryptocurrency.
- Here, the document mentions that as Bitcoin is not issued from monetary authority and as it does not have traditional characteristics as found in fiat currency, it is not recognized as legal tender but as a virtual commodity.
- The document further talks about the fact that the citizens can participate in trade of this commodity, but only at their own risks.
- Later, in 2013 government notice, any payment or financial institution was banned from taking active part in Bitcoin trade. Furthermore, the notice also restricted the insurance services working with any Bitcoin related business.
- In September 2017, the Bank of China issued Announcement to prevent risk of ICO and adding some strict regulations on activities involving cryptocurrency. It banned the domestic cryptocurrency trading platforms as well.
- Later, in 2018, the Bank of China along with the Banking Regulatory Commission and the Ministry of Public Security made announcements, warning against the illegal fundraising under guise of events involving blockchain and cryptocurrency.
China went through multiple ups and downs when it comes to cryptocurrency and the blockchain technology. Even to this date, there are mixed emotions revolving around the cryptocurrency world. However, right now, things are changing towards betterment for sure with changes in Chinese government.