On May 28, 2020, the third session of the 13th National People’s Congress (NPC), China’s top legislative body, voted to pass the long-awaited Civil Code of the People’s Republic of China. This sweeping legal document, often described as the “encyclopedia of social life,” not only establishes comprehensive rules on real rights, contracts, personality rights, marriage and family, inheritance, and tort liabilities, but also for the first time explicitly includes virtual assets such as bitcoin within the scope of inheritable property.
Key Highlights: Virtual Assets Now Inheritable
According to Xinhua News Agency, the new Civil Code states that “the property rights of individuals are equally safeguarded to those of the State and collective, and online virtual assets are protected, too.” The scope of inheritance has been expanded from the existing law. The official outlet emphasized that under the new code, “virtual assets, such as bitcoins, [can] be inherited” as long as they were legally acquired by a natural person. The code will take effect on January 1, 2021.
Wang Liming, executive vice president of Renmin University of China and a renowned law professor, commented: “The civil code is the first law to carry the title ‘code’ for the People’s Republic of China. It lays down the fundamental principles and regulations regarding civil activities and relations. It reflects the will of the people and protects their rights and interests.” He noted that the inclusion of virtual assets in inheritance reflects the need to protect new forms of property in the digital age.
Judicial Precedents: Courts Acknowledge Crypto Property Status
Even before the formal enactment of the Civil Code, several Chinese courts had already set important precedents. For instance, the Shanghai No.1 Intermediate People’s Court ruled that bitcoin is an asset protected by law, while the Shenzhen Futian District People’s Court ruled that ethereum is legal property with economic value. These rulings have paved the way for legislative clarity and demonstrate an increasingly open judicial attitude toward digital assets.
Parallel Progress: Central Bank Digital Currency
In tandem with the civil code’s passage, the People’s Bank of China (PBOC) continues to advance its own digital currency – the Digital Currency Electronic Payment (DCEP). PBOC Governor Yi Gang confirmed to reporters that internal pilot tests have been conducted in multiple cities “to check the theoretical reliability, system stability, conveniency, applicability and risk controllability of the digital currency.” However, he added that no official launch timetable has been set.
Analysts view the developments as complementary: the Civil Code grants legal recognition to private digital assets like bitcoin, while the PBOC’s digital yuan represents a state-led effort to digitize fiat currency. Together, they form a “dual-track” framework for digital asset governance in China.
Expert Analysis: Legal Clarity to Drive Industry Norms
Legal scholars note that explicit recognition of cryptocurrency inheritability carries at least three significant implications. First, it removes legal ambiguity for holders of bitcoin and other crypto who worry about whether their heirs can lawfully inherit those assets. Second, it provides courts with a direct legal basis to adjudicate inheritance disputes involving digital assets. Third, it indirectly encourages exchanges and custodians to develop more robust client asset protection mechanisms. However, questions remain regarding the practical steps for transferring ownership after inheritance, especially given that China still bans cryptocurrency trading platforms from operating within its borders. Supplementary judicial interpretations are expected to address these operational details.
Overall, the passage of China’s first Civil Code represents a historic milestone not only for Chinese civil law but also for global cryptocurrency regulation. By becoming one of the first major economies to protect cryptocurrency inheritance through a foundational code, China sends a positive signal to the entire crypto community worldwide.