Chinese supreme court says settling a debt using cryptocurrencies is legal

Despite the crypto blanket ban, crypto is allowed to be used in the jurisdiction of China, the latest court ruling confirmed.

China is a fully crypto-hater country. In Sep 2021, China announced a crypto blanket ban & ordered all companies (local & foreign) to stop crypto-related any kind of activities in the mainland of China. Under the current Crypto ban laws, if any person/entity is found in crypto-related activities then will face Penalties ranging up to 10 years in prison and fines of up to 500,000 yuan ($79,000). 

On 7 May 2023, a court in China reached out to a crypto-friendly judgment and stated that a debt can be sold is allowing via a small  number of cryptocurrencies, if both the party will agree unless not.

“If it is agreed between the parties that a small amount of virtual currency shall be used to compensate the debts arising from the mutual exchange, labor service, and other basic relations, if there are no other invalid causes, the people’s court shall recognize the contract as valid,” the court ruled.

This latest court ruling confirmed that the crypto is getting legal clarity under the jurisdiction of China, despite the blanket ban on cryptocurrencies in the country.

In late 2022, a similar kind of court ruling from China surfaced in the crypto sector which confirmed that citizens can still trade cryptocurrencies despite the ban. 

This court ruling doesn’t mean that China is going to unban cryptocurrency trading in China but surely gives a clear hint that China is now soft toward the crypto sector. 

Hong Kong adopts crypto 

Hong Kong is a special administrative region of China. In June of this year, Hong Kong’s crypto regulation law will come into effect and it is expected that rule will also bring regulatory approval for retail crypto trading, which is banned since late 2021.

Hong Kong authorities confirmed that they are getting significant support from the Chinese authorities ahead of their crypto adoption plan. 

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