A court in Shenzhen, China has recognized bitcoin as a property clearing the way for merchants to accept it legally as payment.
Chinese authorities banned initial coin offerings in September 2017 and embarked on a crackdown to weed out the then thriving cryptocurrency industry. Before the ban, China was a major cryptocurrency hub in the world helping to drive the soaring bitcoin value.
Only cryptocurrency miners were spared. Even then, a plan was hatched to gradually get rid of them.
Now the Shenzhen Court of International Arbitration says that the digital asset has property value and therefore protected by the law according to a tweet by cnLedger. For this reason, it can legally be owned and circulated.
The basis of the ruling is that bitcoin has economic value in the eyes of the owner like any other property.
Several cryptocurrency businesses including exchanges moved out of China after the crackdown on cryptocurrencies. The government has subsequently sought to ensure that offshore exchanges do not operate in the country.
One of the government’s fears was that bitcoin and other alternative digital assets would undermine the Yuan, its official currency. Due to their decentralized nature, cryptocurrencies are also outside government control.
There has been increased regulatory scrutiny across the world on the sector since the start of 2018. This has occasioned a general market slump now valued at just over $200 billion, about a quarter of its peak in January.
Nevertheless, blockchain, the technology that powers bitcoin has grown exponentially this year with major companies taking it up for various uses.
China’s e-commerce giant Alibaba currently has the highest number of blockchain patents accounting for about 10% of all blockchain patents filed.