Bank of China: Legal to Own Bitcoin – But Not to Trade It

  • Crypto trading remains banned in China
  • Official says P2P trading is allowed
  • China is no longer the leading crypto nation globally

An official of the state-owned Bank of China has revealed that it is still legal to own Bitcoin in the country. This is despite the blanket ban by the government on cryptocurrency trading.

Sa Xiao, who is a member of the Bank of China Law Research Association, was quoted saying that it was legal to hold cryptocurrencies in the country. CnLedger, a recognized crypto news source based in the country tweeted and said:

“It is legal to own Bitcoins in China’ says Sa Xiao, Council Member at Bank of China Law Research Association, cited by The Beijing News. Besides, Xiao considers the occasional exchange of Bitcoins between individuals and individuals is legal.”

Tightened ban on OTC Trading

China has been among the countries that have been the most hard on cryptocurrency enthusiasts because of a ban that was imposed in crypto-related activities in the country since 2017. The local press reported in September 2017 that the country had officially banned cryptocurrency trading and as a result, cryptocurrency exchanges like Huobi, OKCoin and BTC China closed or wound down their operations in the country.

Since then, cryptocurrency trading has remained strictly prohibited. The Chinese government tightened the ban on over-the-counter (OTC) trading in August 2018 by asking Alipay, the most widely used Fintech application in the global market to crack down on over-the-counter trading.

P2P trading remains legal

The report by Beijing News quoted Xiao saying that owning Bitcoin is legal in the country and that while cryptocurrency exchanges are banned from operating, people are free to transfer Bitcoin among themselves. As per the current framework, individuals can possess virtual properties including Bitcoin. Xiao added that the occasional P2P trading of Bitcoin is in nature one of the rights of ownership therefore making P2P trading legal in the country.  

In contrast to the regulatory efforts by other leading countries around the world, China’s stance on cryptocurrencies has remained harsh. Last month, BR reported that the Chinese government was considering banning cryptocurrency mining activities in the county.  The National Development and Reform Commission (NDRC) recommended that the government should shut down crypto mining facilities in China.

China no longer in first place in crypto development

The NDRC reported stated that cryptocurrency mining is a waste of resources (energy), polluted the environment, and classified it as an activity that does not contribute to the overall growth of the country. If the government follows the recommendation of the NDRC, then cryptocurrency mining would join ICOs and crypto trading as illegal activities to carry out in China. While it remains unclear whether China will reverse its position on cryptocurrency, the country is no longer the leading cryptocurrency trading region in the world, a position it occupied before the 2017 ICO and crypto trading ban.