Beijing's Financial Court will introduce a new scope of rights to protect the property of digital currency users, as long as they are considered legal assets in China.
Cai Huiyong, who was appointed president of the Beijing Financial Court in March, said he is working on formulating new regulations that will guarantee the property rights of Chinese citizens who use digital currencies, provided that they are considered legal in the country. The news was reported by Yicai Media Group's local financial media outlet, Yicai Global, which reported that the court is determined to protect financial innovation in the Asian powerhouse.
It is worth remembering that the Chinese authorities have been strongly attacking the industry of cryptocurrencies, , prohibiting banks, financial institutions and other companies in the country from maintaining any type of commercial or advertising relationship with these digital assets. Also, Chinese authorities have been expelling cryptocurrency miners, such as bitcoin y Ethereum, of its territory; arguing environmental damage due to energy consumption.
However, despite the crackdown by the authorities, Chinese citizens are still able to hold cryptocurrency investments on a personal basis. In fact, in April, the People's Bank of China (PboC) stated that crypto assets are an important tool for alternative investment, so a total crackdown on the crypto industry does not seem to be in the powerhouse country's immediate plans.
Huiyong's remarks also highlight the importance of maintaining and ensuring innovation in the country's financial sector.
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Strengthening and protecting digital currency innovation
According to Huiyong, the Beijing Financial Court will submit a law reform to introduce several protection measures focused on the innovation of new financial technologies. In addition, the court seeks to strengthen the protection of the rights and interests of legal digital currency owners, as well as ensure virtual ownership and the security of financial data.
The new measures will help ensure that fintech innovation is protected by China's rule of law.
China, cryptocurrencies, CBDCs and NFTs
Several experts believe that the virtual property mentioned by the designated president of the Beijing Financial Court may refer to the digital currencies of central banks (CBDC); specifically of China's digital currency known as DCEP or digital yuan, which will be launched publicly next year during the Beijing 2022 Winter Games. There are also those who believe that the Court may be referring to non-fungible tokens or NFT, which clearly demonstrate and maintain user ownership and which gained increased interest in the country over the past few months.
Tech giants like Alibaba and Tencent have been drawn to the demand and boom that NFTs are experiencing, forcing them to launch services that allow their users to mint and manage non-fungible tokens.
Tencent debuted its non-fungible token platform, called Huanhe, with the exhibition of a collection of 300 NFTs called “TME Digital Collectibles”Alibaba, which launched an NFT marketplace as part of its online payment platform Alipay, said that to prevent speculation with new non-fungible tokens, they must be held on the platform for a minimum of 180 days before being transferred, traded or negotiated.
As crypto blogger Wu Blockchain noted earlier this month, China’s current restrictions on the crypto industry make these services limited, rather than open platforms that foster innovation and development.
Jiemian, another major Chinese financial media outlet, noted that despite the Beijing Financial Court’s stated intentions to protect and boost financial innovation, noting that the new legal framework will apply only to “legal digital currencies” is not a good sign for the crypto industry in the country.
Continue reading: China will continue to crack down on cryptocurrency trading and also DeFi
