Countries around the world are still struggling to classify cryptocurrencies. The SEC even created a special office to deal with fintech and new digital assets. China has come out to classify cryptocurrencies as legal properties, and not legal currencies.
The Shenzhen Court of International Arbitration (SCIA) has ruled out that digital coins, especially Bitcoin, are to be classified as legal properties. This means that Chinese citizens and legally own and transfer their cryptocurrencies, as they are their own property.
A news report from Cryptovest posted the SCIA positive comment on why Bitcoin should and is classified as property:
“Although Bitcoin may not be a legal currency, that does not prevent it from being protected by law as a property,” said SCIA in the released case analysis. “The Party contends that Bitcoin has characteristics of a property (SOV) that can be controlled by the owner; it has economic value and can bring economic benefits to the owner.”
There was a specific reason why digital coins are now ruled as legal properties. This has to do with China banning ICOs and multiple crypto exchanges back just recently. When there is a legal case involving cryptocurrencies, just because there is a ban on ICOs and trading does not mean that there is no contractual obligation when it comes to owning and transferring digital assets.
Cryptocurrencies hold value and transacting with value holds legal status. As such, the Chinese court decided to put Bitcoin and other digital coins as legal property, even though they are not recognized as official currencies.