1. China’s Supreme Court issued guidelines for cryptocurrency disputes allowing settlement with digital assets with the agreement of both parties.
2. Beijing court ruled that citizens could only treat cryptocurrencies as virtual assets and not use them as a currency.
3. Despite the ban, China has seen a surge in investor interest, ranking among the top ten countries in the crypto adoption index.

Although China has prohibited digital assets, its cryptocurrency industry is changing with new advancements. The country’s Supreme Court recently issued guidelines related to disputes involving cryptocurrencies. According to Wu Blockchain’s report on May 7, the court declared that it would be permissible to settle a debt with a small number of digital assets if both parties agree.

The court acknowledged that cryptocurrencies possess virtual properties within a network in such a scenario. Nonetheless, it stressed that this course of action would be authorized only if there were no other legitimate objections against it.

If it is agreed between the parties that a small amount of virtual currency shall be used to compensate the debts arising from 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.

Supreme court – china

Furthermore, the highest court also clarified that if one party consents to transfer cryptocurrencies to another party, but the receiving party is unable to fulfill their end of the bargain due to policy constraints, the court will decide the compensation based on the actual value of the property that the receiving party accepted at the moment of signing the agreement.
This recent development highlights a change in China’s attitude toward digital assets and could have significant consequences for investors in the cryptocurrency market.

Despite China’s ban on cryptocurrencies, there has been a notable increase in investor attention in recent months. This interest was emphasized in a report by Chainalysis from late 2022, which disclosed that China was among the top ten nations in the world regarding crypto adoption index.

According to data from September 2022, the Beijing Number One Intermediate People’s Court ruled that citizens could still engage in cryptocurrency trading despite the ban. Nevertheless, there is a catch – the court declared that interested investors could only treat cryptocurrencies as virtual assets and not use them as a currency.

Given the Beijing Number One Intermediate People’s Court’s ruling that citizens can only treat cryptocurrencies as virtual assets and not use them as currency, it remains uncertain whether the recent guidelines from the Supreme Court imply that the government now acknowledges the legal standing of cryptocurrencies.

Even though there is ambiguity about China’s stance on cryptocurrencies, it appears to recognize the increasing interest in digital assets. In line with this, as per a previous report, the country has introduced a 20% personal income tax on investment profits for individual cryptocurrency investors and Bitcoin (BTC) miners.