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China Prohibits Paying Salaries in Virtual Currency

Mon, 15 Aug 2022
Categories: China Legal Trends

In July 2022, the Chaoyang Primary People’s Court of Beijing (the “Court”) ruled in a labor dispute that companies should not pay wages in virtual currency.

In the first-instance judgment, the Court held that the company should pay more than CNY 270,000 of salary and bonus to the employee Mr. Shen in Chinese currency (Renminbi).

This dispute arose from Shen’s disagreement with the company’s payment in the form of virtual currency. After the company was deregistered, Shen sued its shareholders, Hu and Deng, for his salary, performance bonus, and overtime pay.

The Court held that according to the PRC Labor Law, wages should be paid monthly to laborers themselves in the form of currency. In addition, Article 5 of the “Interim Provisions on Wage Payment” (工资支付暂行规定) provides that wages shall be paid in legal tender and shall not be paid in the form of allowances in kind or negotiable securities instead of currency.

According to the Law on the People’s Bank of China (中国人民银行法), China’s legal tender is the Renminbi (RMB). The “Notice on Further Preventing and Resolving the Risk of Virtual Currency Trading and Speculation” (关于进一步防范和处置虚拟货币交易炒作风险的通知) issued in 2021 specifies that virtual currencies do not have the same legal status as legal tender and that virtual currencies such as Bitcoin, ETH and USDT are not legal tender, and should not and cannot be circulated as currency in the market.

Related Posts:

Does Chinese Court approve Bitcoin Exchanges?

Chinese Court Confirms Bitcoin as Virtual Commodity

 


Cover Photo by Sting Du on Unsplash

 

 

Contributors: CJO Staff Contributors Team

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