China continues to flip its stance on whether or not it will allow Cryptocurrencies from outright banning them on August 22nd of this year to stating today that they should be defined and protected as property. Even though the latest decision was not made by the highest level of the Chinese government, it still has a strong basis due to the fact that it was made by an International Arbitration court. These courts typically are tasked with solving different sorts of international business disputes, which according to today’s report, includes Cryptocurrency deals between consumers.
Knowing this, one major question that is probably on the tip of everyone’s tongue is: what does this mean for the legal and regulatory future of Cryptocurrencies? In a general sense it does not seem to mean much yet, beyond the fact that China is still refusing to truly follow through on its ban. At the same time, it could also be concluded that if other countries take this legal decision as an example, they could use it as a basis for part of a future regulatory framework. Even so, when it comes to what seems to be China’s consistent inability to decide whether or not to support Cryptocurrencies, such a possibility would seem to be very much in the air.
What might help in terms of understanding China’s current situation is to think about the fact that there is a difference between Blockchain projects and Cryptocurrency projects. In a sense, it comes down to the question: is the underlying coin a token or a currency? In other words, does it drive usage of the product and or is it simply some sort of asset? If something is a currency, it has a different legal status then something that is fuel for an online business. In China’s case, they seem to be treating the industry in this way, at least for now.
Lending credence to this stance is the fact that the same arbitration court mentioned above made it clear that just because China’s ban truly encompasses trading Cryptocurrencies and running ICOs, but not explicitly owning Crypto currencies. Inside of the same ruling, they also specifically stated that Bitcoin does have economic values and economic benefits.
As the year comes to a close, we will see if this ruling sways the government in any sort of new direction with regards to its ban. Even if it does not, the fact remains that China believes in the potential of the Blockchain, as is evidenced by its wide ranging investments into the technology this year.
By: BGN Editorial Staff