China’s SC Approves Crypto To Settle Debts
Despite China’s existing blanket ban on digital assets, the country’s cryptocurrency sector is evolving in response to new developments.
According to a recent update, the country’s Supreme Court issued guidelines regarding cryptocurrency-related disputes, stating that settling a debt with a small amount of digital assets would be legal if both parties agreed, according to Wu Blockchain on May 7.
The court acknowledged that cryptocurrencies have network virtual properties in this scenario. However, the court stressed that this approach would be permitted only if there were no other valid reasons to oppose it.
“If it is agreed between the parties that a small amount of virtual currency shall be used to compensate the debts arising from mutual exchange, labor service, and other basic relations, if there are no other invalid causes, the people’s court shall recognize the contract as valid,” the court ruled.
The Supreme Court also clarified that if one party agrees to transfer cryptocurrencies to another but the receiving party is unable to fulfil their end of the bargain due to policy constraints, the court will determine compensation based on the actual value of the property accepted by the receiving party at the time of contract signing. This latest development highlights China’s shifting stance on digital assets, which could have serious consequences for cryptocurrency investors.
(With inputs from Shikha Singh)
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