Bitcoin, Crypto Tech

China recognizing Bitcoin as a Commodity

The Beijing Arbitration Commission posted an article that stated that the use of bitcoin as a commodity was never banned in China. This explains that the stand of the Chinese government concerning Bitcoin control revolves around three areas.

Recognizing Bitcoin as a commodity

According to the printed article about the legal nature of Bitcoin in China on Thursday, an independent non-profit group based in Beijing provides arbitration, mediation, and other dispute resolution services.

Economist Wang Jin, commission arbiter wrote the article. “There are still differences in the understanding of the legal nature of bitcoin under the current regulatory system” according to various Bitcoin litigations, he began.

Wang described that China’s current “Bitcoin control policy” is mainly based on two messages. The first is the Bitcoin Risk Prevention Notification issued on December 3, 2013, by the People’s Bank of China (PBOC) and several other ministries. The second is the announcement of financial risk prevention issued on September 4. 2017 by seven departments, including PBOC. He said that they reflected “China’s current stance on Bitcoin control”, which revolves around three aspects.

The first is that Bitcoin is not a legal tender. The second is that “Bitcoin is a virtual commodity”. Wang stressed that China does not recognize bitcoin as “virtual currency” but “as a virtual commodity”. The third aspect is that some activities related to Bitcoin are prohibited by the state, such as “marker trading platforms that do not trade in legal currencies, tokens, and virtual currencies”.

Another example is financial institutions and non-bank payments “not directly or indirectly offering products or services such as account opening, registration, trading, clearing and settlement to fund the issuance of tokens”. However, insurance companies “can enter tokens and” virtual currencies “in the area of insurance obligations,” Wang said. The economist concluded: In short, the state does not prohibit Bitcoin activities as virtual goods.

He clarified that there was a ban on the use of bitcoin as a legal means of payment and specific activities, as mentioned above.

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