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The bitcoin price has swung wildly—dragging etheruem and other major cryptocurrencies including XRP
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Now, a top court in China, which has recently moved to open up bitcoin and crypto trading to the mass market in Hong Kong, has written a report declaring crypto is “legal property and protected by law,” according to local media reports.
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China president Xi Jinping has overseen a crypto crackdown in the country over recent years that … [+]
“Virtual currency is not classified as an illegal item. Therefore, under the current legal policy framework, the virtual currency held by relevant entities in our country is still legal property and protected by law,” the People’s Court of China wrote in a report titled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case,” according to a local news site ODaily.
“At some point the strategic embrace of crypto technology by the PRC [People’s Republic of China] will catch the attention of U.S. policymakers,” Faryar Shirzad, chief policy officer at bitcoin and crypto exchange Coinbase, posted to X (Twitter). “Chinese courts don’t create a legal framework around anything without the blessing of central authorities.”
The court report follows bitcoin and crypto companies in Hong Kong, a special administrative region of China, being issued licenses to offer crypto trading to the public under a new regulatory regime. Last month, the first licenses were awarded crypto exchanges HashKey and OSL.
Despite China’s 2021 bitcoin, ethereum and crypto crackdown, which saw it expel crypto companies and so-called miners who maintain blockchain networks and crashed the bitcoin price, some have predicted Hong Kong is primed to become a global crypto hub.
In June, the chief executive of the stablecoin issuer Circle, Jeremy Allaire, who oversees the $28 billion USDC stablecoin, said he sees “enormous demand” for digital assets in emerging markets, with China and Asia at the “center.”
“Hong Kong is clearly looking to establish itself as a very significant center for digital assets markets and stablecoins and we are paying very close attention to that,” Allaire told Bloomberg at the World Economic Forum in Tianjin, China.
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The bitcoin price rally this year has collapsed as economic and regulatory pressures mount. However, … [+]
Meanwhile, the Chinese economy is flashing warning signs along with the country’s property market, forcing China’s central bank to step up its economic stimulus measures.
“China is the most significant risk economically, as we pointed out two weeks ago and the U.S. dollar/Chinese yuan continues to climb higher,” Markus Thielen, head of research and strategy at crypto market maker Matrixport, wrote in an emailed note.
“China’s doomsday stories must be near an extreme and the authorities appear to acknowledge the problems and are trying to support the economy. Recently, we have seen stories about stock trading stamp duty being cut, some property stimulus attempts, and local fund managers being ‘encouraged’ to not sell shares.”
This week, China’s central bank cut the amount of foreign exchange that financial institutions must hold as reserves for the first time this year, while major Chinese banks cut interest rates on a range of yuan deposits.
