ALBAWABA - In recent days, the price of Bitcoin and other cryptocurrencies has experienced significant fluctuations following widespread attention surrounding a federal court's decision deeming the rejection of a US Securities and Exchange Commission (SEC) cryptocurrency exchange-traded fund (ETF) "arbitrary." Cryptocurrencies surged by up to 7% before subsequently declining amid expectations that major cryptocurrency investors, such as billionaire Elon Musk, may sell assets as market values rise.
However, the most significant news may come from China, where a report from the Supreme Court has confirmed that cryptocurrencies are "legal property protected by law," according to local media reports.
The report coincides with other news suggesting that Chinese authorities have recently moved to allow trading of Bitcoin and other cryptocurrencies in the Hong Kong market.
The Chinese People's Court report, stated, "Virtual currency is not classified as illegal. Therefore, under the current legal framework, virtual currency held by relevant entities in our country remains legal property protected by law," as reported by Forbes.
Following the release of this news, Farzad Sharzad, Chief Policy Officer at cryptocurrency exchange Coinbase, tweeted, "At some point, China's strategic embrace of crypto tech will attract attention from U.S. policymakers…Chinese courts don't create legal frameworks for anything without central authority blessing."
(Shutterstock)
The court's report comes days after licenses were issued in Hong Kong to allow cryptocurrency trading to be opened up to the public under a new regulatory system, with the first licenses being granted to cryptocurrency exchanges HashKey and OSL.
These developments come despite China's crackdown on Bitcoin, Ethereum, and cryptocurrencies in 2021, which saw cryptocurrency companies and miners being expelled. This crackdown led to a collapse in Bitcoin's price, as many had previously anticipated that Hong Kong was poised to become a global cryptocurrency hub.
Now, the opportunity may seem open for Hong Kong to reclaim that dream.
In June of last year, Jeremy Allaire, CEO of stablecoin issuer Circle, which oversees the $28 billion USDC stablecoin, stated that he saw a "massive demand" for digital assets in emerging markets, with China and Asia at the "center of that demand."
Some analysts believe that recent efforts by Chinese authorities to support a slowing economy may expedite the reopening of doors to cryptocurrency adoption as a means to attract more investments domestically, following significant capital outflows in recent months due to economic concerns.
