Could China Be Ready to Support Bitcoin? A Look at Recent Pro-Bitcoin Events Unfolding

  • Chinese court documents are willing to consider Bitcoin to be a commodity.
  • Presently, residents are unable to actually transact with cryptocurrencies, though they can possess it.

Bitcoin has been a significant source of stress in China thorough the last few years. In 2017, the country made a bold move to ban Bitcoin exchanges, which makes it highly difficult to examine crypto trading volume. Still, even after the troubles that the cryptocurrency industry has gone through in 2018, Bitcoin has risen by 200% since January this year, retrieving itself from the bear market that gave the whole industry a bad reputation last year.

The Bank of China, which is the fourth-largest bank in the world by assets, is seemingly shifting its approach, posting an infographic on their website that takes a pro-Bitcoin stance, according to reports from Forbes. The infographic described the history of Bitcoin and the way cryptocurrencies operate, following the legal recognition of Bitcoin by the Chinese court. In this court session, the cryptocurrency was deemed to be digital property.

The whole Bitcoin and cryptocurrency community has already been welcoming to this idea, especially considering that China is still contributing over half of the computing power of Bitcoin. Even with the ban against cryptocurrency, the country still managed to create substantial trading volume. With the ban, Chinese citizens can hold cryptocurrencies. However, legally, these crypto holds can’t actually use them on exchanges, even with traditional currencies.

Samson Mow, the chief strategy officer of Blockstream, posted to Twitter to explain the new article that the Bank of China published on cryptocurrency, including the infographic. He added that he “never” imagined that this would happen, stating that the action was rather “bullish” on China’s part.

Other Twitter users that speak Chinese took note, saying that they found the infographic “in favor of Bitcoin” as well. If the 1.4 billion people in the population of China were suddenly able to get into the cryptocurrency industry, mainstream Bitcoin adoption would not be far off.

According to China’s Hangzhou Internet Court, Bitcoin should be considered a commodity, since it is rare, can carry value, and can be used for the transfer of value. However, much like previous rulings that have been published in China, Bitcoin still will

“not have the legality of an official currency.”

Other reports show that the central bank, which is the People’s Bank of China, is in development for their own state currency, which could be in response to the announcement of Facebook’s Libra crypto project. If Facebook follows through, Libra could end up behaving as a global currency, but regulators around the world would need to coordinate to make that happen.

There are already many individuals who believe that issuing central bank digital currencies would only perpetuate how crucial decentralized cryptocurrencies are to the economy. Still, it is worth noting that the private sector in China is seeing a growing demand for Bitcoin, as well as other digital currencies, likely due to chief executive Ren Zhengfei from Huawei calling to find a way to compete with Libra.

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