Bitcoin Moves Toward Mainstream Legitimacy Following Shanghai Court Ruling

Tron’s founder, Justin Sun, has pointed out a recent article by the Shanghai Second Intermediate People’s Court, which seems to legitimize the flagship digital currency, Bitcoin, despite China’s anti-crypto stance. 

What The Chinese Court Has To Say

In a tweet shared on his X (formerly Twitter) platform, Sun quoted a part of the article that labels Bitcoin as “unique and non-replicable.” On a closer look, the article discusses the legal attributes of Bitcoin and how judicial decisions should be made on crimes relating to them.

For one, the author believes that, by mentioning how cryptocurrencies are used as an object of illegal financial activities such as illegal fund-raising, the People’s Bank of China indirectly recognizes the financial nature of cryptocurrencies like Bitcoin despite the current ban. 

However, it stated that because of the regulator’s stance, the legal attributes of digital currency are not clarified, making it harder to dispose of them judicially. It noted that despite some court’s attempts to disregard these digital currencies’ “monetary” and “property” attributes, they have failed woefully. 

Regarding the monetary attribute, these courts, in their judgments, still identify the sale price of digital currencies. Meanwhile, concerning property attributes, these courts “face the dilemma of being unable to avoid the property value presented by digital currencies” when the case is ongoing. 

It elaborates on the property attribute of digital currency and how it is difficult to avoid. It labels Bitcoin “unique and non-replicable” and different from virtual currencies like “Q coins.” It further alluded to the currency’s “relative scarcity” and how this fact is widely recognized. Because of this, it is no longer possible for the court not to avert its mind to Bitcoin’s financial status.

The author acknowledges that Bitcoin’s “decentralized characteristics” and that it isn’t managed by a central authority (like a central bank) excludes its reliance as a currency. However, Bitcoin still possesses “major functions of currency” such as terms of scale, means of circulation, means of storage, means of payment, and world currency (Bitcoin is used worldwide).

Once again, the article points to the property attributes of Bitcoin as it can be obtained through “labor production” mining or through inheritance. As such, despite not being a “legal currency” in China and carrying several descriptions, the property attributes “cannot be completely denied.”

What This Means Going Forward

The court’s legal opinion gives more legitimacy to Bitcoin and digital currencies as the article states that these tokens undoubtedly have value even though the People’s Bank of China chooses not to acknowledge this fact.

Additionally, the court would be more inclined to adopt arguments that cryptocurrencies can be classified as personal properties, especially considering that it mentions that Bitcoin, for example, can be acquired through mining, inheritance, and even buying and selling. 

This line of argument is similar to when a Singaporean judge declared crypto personal property. In that case, the judge likened crypto to fiat and stated that since the latter passes as personal property, the former should pass as one, too.

He also stated that one cannot say that cryptocurrencies do not have value, as value is “a judgment made by an aggregate of human minds.” This is similar to what the Shanghai court said in this article, that the Chinese still use digital currencies as a medium of exchange despite the existing ban.