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China Declares Bitcoin as Virtual Property with Monetary Value

A property dispute involving Bitcoin was held in the internet court in Hangzhou, China on July 18, setting a new precedent by declaring that Bitcoin is virtual property with monetary value.

According to the case of plaintiff Wu against defendants FXBTC and Taobao, it has been recognized that Bitcoin has the attributes of virtual property and therefore should be protected according to Chinese laws and regulations.

For the first time, Bitcoin has been recognized as valuable, scarce and disposable which are attributes of property with protection under Chinese law, according to Pang Lipeng – one of the attorneys on the case. The court’s ruling concludes that owning cryptocurrencies in China is still legal and should be protected according to the corresponding property rights.

However, this is not the first case where cryptocurrencies have been deemed legal by the Chinese judicial body. In a previous case, the Shenzhen Arbitration Commission mentioned that cryptocurrency assets should be protected in accordance with Chinese regulations on property ownership in October 2018.

“This is a clear signal that the financial authorities are starting to loosen control over digital currency and virtual currency,” Cao Yin, one of the earliest advocators of blockchain technology in China, told the Global Times on July 18. However, they also officially mentioned that at the People’s Bank of China says that “Indeed, Bitcoin is virtual property, but it’s not fiat money.”

Wu’s case

In 2013, plaintiff Wu purchased 2.657 Bitcoins which was worth around RMB 20,000 at the time from the website “FXBTC” which was operated through a Shanghai technology company through Taobao.

The purchased Bitcoins were stored on a virtual wallet on the FXBTC website. When Wu wanted to access his Bitcoins in 2017, he found that the FXBTC website was shut down and therefore could not gain access to his funds.

Wu claimed that he was not notified of the website’s closure and could not withdraw his funds before the website shut down. Wu was not able to contact the website’s operator and demanded the defendants to pay RMB 76,314, which is the transaction price of 2.675 Bitcoins at the time of prosecution in compensation for his economic losses.

The court rejected Wu’s claims against FXBTC’s operator and Taobao due to the lack of evidence and the entire lawsuit was rejected. However, the court affirmed the legal status of Bitcoin as a virtual property in this case as a legal commodity but not a currency.

Huawei’s CEO Responds to Facebook: China Can Issue Its Own Libra

Ren Zhengfei, CEO of China’s Huawei believes that China can create their own digital currency in response to Facebook’s Libra.

In an interview with the Italian media, in response to a question, Ren Zhengfei responded with “China can also issue such currency by itself. Why wait for others to issue it?”

Reported earlier this month, China’s central bank, the People’s Bank of China believes that Facebook’s Libra could be a sign of a threat to China’s economy. China could be in a major disadvantage if Libra were to be pegged to the U.S dollar.

The director of the People’s Bank of China research bureau, Wang Xin stated that the bank has decided to create its own digital currency due to the lack of clarity of the U.S dollar once Libra is issued. He also stated that there could be economic, financial and political consequences.

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US Declares China a 'Currency Manipulator' while Bitcoin Sees Growth

The US Declares China a ‘Currency Manipulator’

The US Treasury Department officially designated China as a “currency manipulator” on Monday following the most significant stock market losses the US has seen in 2019. There was a 2.9% plunge overnight in the Dow Jones Industrial Average, Nasdaq down 3.4% while Bitcoin is up 3.2% as tweeted by Tim Draper.

In a Tweet posted by Donald Trump, he mentioned that China deliberately weakened the Yuan to “steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices.”

China allowed the Yuan to sink below 7 to the US dollar, to its lowest level in 11 years to retaliate for US threats of new tariffs on Chinese products. Beijing announced that it would suspend purchases of US agricultural goods.

No country has been officially named a “currency manipulator” by the US since 1994 by Bill Clinton towards China. Under the law established in 1998, the Treasury Department must name any countries that it finds to be using their legal tender to gain trading advantages over the US.

Bitcoin’s Growth Is Due to an Inflow of Chinese Capital

CEO of Circle Jeremy Allaire suggested that this growth was due to an inflow of Chinese capital, given the correlation between Bitcoin’s gains and the sinking of the Yuan. Although Bitcoin is not easily accessible in China, many investors go through offshore firms to make purchases.

Chart showing BTC/RMB, Bitcoin’s surge after Trump’s announcement. Chart via CoinGecko

China banned all crypto-related activities in 2017 as there was a wave of initial coin offerings. Recently, China has been softening its stance on cryptocurrencies, as it was announced in a court in Hangzhou that Bitcoin is virtual property.

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China’s Central Bank Accelerates R&D of its Legal Digital Currency

People’s Bank of China, the Central Bank of China made an announcement of the acceleration of the development of its legal digital currency.

In July, former PBoC governor Zhou Xiaochuan warned that China must take precautions against Libra and must compete against them. The PBoC started to research on digital currencies as Bitcoin became increasingly popular.

Huawei’s CEO Responds to Facebook: “China Can Issue Its Own Libra”

This week, a video conference was held in China regarding the implementations of the important arrangements of the Party Central Committee and State Council on the economic and financial work of the second half of 2019, while reflecting on the first half.

PBoC announced that they are developing their financial technology and developing a digital Yuan due to the growing adoption of cryptocurrencies worldwide, especially after Facebook’s Libra announcement. Walmart recently also came out with its USD-pegged digital currency.

As of Aug 4, the PBoC has filed 74 patents regarding its digital currency according to China’s State Intellectual Property Office.

People’s Bank of China Announces Its Digital Currency is Ready

The Central Bank of China has announced that its digital currency can now be said to be ready. In a major event, the China forum as reported by local news site Shanghai Securities News on August 10, the deputy director of the People’s Bank of China (PBoC) Mu Changchun stated that over five years of rigorous research work has been put into creating a prototype that adopts the Blockchain architecture.

Mu also said that issuing a digital currency using a pure blockchain architecture was going to be a herculean task to achieve considering the fact that China, being a big country has retailers that require high concurrency performance.

China’s Central Bank Accelerates R&D of its Legal Digital Currency The country has decided to implement to use of a two-tier operating system that aims at taking care of the needs of the complex economy of the nation with its vast territory and large population. This system has been said to have the PBoC on the first tier and the commercial banks on the second tier. According to Mu, this system will improve accessibility, bring about better mass adoption rate amongst the general public, as well as encourage innovation amongst commercial bodies.As reported by a news outlet a few days ago, the PBoC has been making efforts to get ahead of the U.S. and Facebook’s Libra by issuing a national cryptocurrency while the American politicians, on the other hand, are trying to take a break on the social networks stablecoin due to regulatory concerns.

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BTC Breaks Its Strong $10,000 Support Amidst US-China War Trade Cool Off

The price of Bitcoin has taken a serious hit in the past few days as the largest cryptocurrency has dipped below its supposedly strong support of $10k and bounced back up.

Market visualization. Source: Coin360

The relief of the market as the tension eases off with Bitcoin taking the hit

As the data reflects from coin360 shows, we see that investors have not just had a gloomy week but a have been bashed during the entire week.

As it has been observed in recent months Bitcoin has been seen to have developed a pattern; Bitcoin reversed its success from the previous weekend when geopolitical uncertainty and fiat currency weakness and within several jurisdictions had pushed its price above the $12,000 spot.

Hong Kong and Argentina took the lead as regards fueling this theory which critics of Bitcoin such as Peter Schiff had taken the opportunity to refute as the markets fell. He made a statement through a tweet on Tuesday saying that:

“Now that trade tension with China has eased, the pressure on the yuan is off. Those who bought Bitcoin to speculate on Chinese safe-haven buying, which never happened, are taking their chips off the table,”

On the other hand, Bitcoin advocates on social media, have been seen to be more open to other explanations. According to a survey conducted by a regular analyst and trader Josh Rager delivered a rare even split regarding the future Bitcoin price. In the survey, amongst the 35000 participants, 50% of them had voted for and against the price of Bitcoin taking below $10000 in the short term.

Present-day Blockchain Industry Hindered by Structural Scarcity of Talents

Chen Xin, a senior official at China’s Ministry of Industry and Information Technology, has asserted that the digital economy has become a notable player in China’s development and economic growth. The trend witnessed is progressing at an alarming rate.

The digital economy has emerged to be a formidable force in the present age as people’s work and lives are significantly transformed. For instance, costs have been reduced, whereas efficiency has been elevated. As a result, conventional industries have attained exceptional development standards.

Nevertheless, Xin affirms that a problem exists in the blockchain field based on the structural shortage of skills. As a result, this ought to be viewed as the primary hindrance of the blossoming of the current blockchain sector.

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Tether Plans to Issue Stablecoin Backed by Chinese Yuan

Tether has been reportedly working on a new stablecoin pegged to the Chinese Yuan. The stablecoin project named “CNHT” came from the intention of Zhao Dong, one of the shareholders of the Bitfinex crypto exchange.

Zhao Dong’s digital banking business, RerenBit will be supporting CNHT’s trading and deposit services as soon as it is launched.

Zhao also confirmed that he believes that the new stablecoin “will be launched very soon, possibly within weeks.” The new stablecoin’s reserve is expected to be held in a Belgian bank.

The two main benefits explained by Zhao include that it would make Tether less dependent on the US dollar while boosting the circulation of the Renminbi held offshore.

He later added:

“Personally, I think the offshore yuan stablecoin could boost the circulation of offshore Renminbi and internationalize it. Regulators may be happy to see it proceed and succeed.”

Amidst the new stablecoin plans, Bitfinex and Tether are still under an ongoing investigation regarding an alleged cover-up. The NYAG is inquiring into Bitfinex’s loss of access to funds totaling to $850 million and borrowing funds from Tether’s US dollar reserve.

Bitcoin Hash Rate Remains Steady as Miners are Wiped Out by China Floods

Bitcoin network hash rate, an evaluation of the activity being undertaken by miners on a particular blockchain, has remained high despite the presence of floods in China. Nevertheless, some mining operatives have faced the wrath of being destroyed. On Twitter, several users have reported the disastrous effects of floods in Sichuan, a Chinese province. They have proclaimed that one of the Bitcoin mining institutions had been destroyed.

Officials from Pooling, a huge Bitcoin network pool, tweeted:

A local mining farm based in Sichuan, China was DEVASTATED by the recent heavy rainfall in the region.

Moreover, photographic evidence linked to the floods was availed by a co-founder of 8btc, a crypto media outlet, known as Red Li. He, however, asserted that the disastrous event had not compromised Bitcoin’s network conduct as the hash rate remained steady.

On the other hand, the Bitcoin network was not stable last year. Expressly, in July 2018, China suffered a similar fate, but the effects were catastrophic as Bitcoin’s performance dramatically diminished. This occurred after powerful floods destroyed the mining hardware.

Information availed by Bitinfocharts, a monitoring scheme, the hash rate averaged 79 quintillion hashes every second on August 21.

Facebook’s Libra Encouraged to Exclude the Chinese Yuan Being Tied to the Stablecoin

While Facebook is facing regulatory approvals for its Libra project, Facebook told US senators that the initial group of currencies that Libra will be likely backed by the US dollar, Euro, Yen, British Pound, and the Singapore dollar.

Facebook reportedly produced the list regarding the concerns expressed by Virginia Democratic Senator Mark Warner that China may try to push the Libra Association to include the yuan in the stablecoin, Libra. Senator Warner mentioned that China has been encouraging other governments to include its currency in their reserve holdings, and asked Facebook to commit to excluding it from the list of currencies backing Libra.

The Libra Association would be taking all factors into consideration, “Any decision whether to add a new currency to the Libra Reserve would be made based on all the facts and circumstances at the time, including any direct or indirect regulatory restrictions.”

Libra would be backed by a reserve fund consisting of government-issued currencies and debt instruments.

Facebook and the Libra Association have been facing a lot of pushback from lawmakers and regulators regarding their plans to launch their digital currency; concerns have been raised regarding privacy and data security. Facebook also sees an alternate route of launching the digital currency outside of the US regardless of concerns from US regulators.

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