A Legal Ruling on Payments
The recent ruling by Beijing’s Chaoyang District People’s Court has put a clear stop to the use of stablecoins for salary payments. While cryptocurrency transactions may thrive in the shadows, the court emphasized that digital currencies like Tether (USDT) cannot be treated as legal tender. They mustn’t circulate as currencies, and it’s official – only the renminbi (RMB) makes the cut for employee payments.
It All Started with a Lawsuit
The ruling came from a court case where a worker from a local blockchain firm claimed his employer opted to pay his wages in USDT, instead of the RMB. Guess what? The court decided to back the employee’s request for RMB, citing that it aligned with local laws for compensation.
Take That, Crypto! The Bank Says No!
Referencing China’s sweeping crypto ban from September 2021, the court underscored that stablecoins don’t possess the same legal status as traditional currency. Those who thought they could bend the rules with USDT were promptly schooled: no legal status = no salary payments. The court mandated that the employer must pay the employee over 270,000 RMB (equating to about $40,000) in outstanding wages and bonuses. Ouch!
Crypto Executives Optimistic About Regulations
Despite the government’s crypto crackdown, some blockchain enthusiasts remain optimistic. Yifan He, CEO of Red Date Technology, is one such executive. He recently stated that stablecoins like USDT could potentially thrive – if only they received proper regulation. He believes USDT and USD Coin (USDC) should be considered payment-related currencies rather than speculative assets. For those in regulatory positions, however, it seems that banning USDT transactions in China could be a tricky venture.
USDT: More Popular Than You Think?
In terms of market performance, USDT continues to hold the third-largest cryptocurrency position behind Bitcoin (BTC) and Ether (ETH). With daily trading volumes soaring at $57 billion, it’s clear that USDT isn’t going away anytime soon. However, the court’s ruling might just keep it away from Chinese salary payments for good.
