China’s Chaoyang Court on Wednesday prevented businesses from paying salaries with an altcoin. In addition, the court ruled that cryptocurrencies should not be used as a medium of exchange. As a result, unpaid salaries and bonuses have to be paid in Renminbi (RMB).
Chinese court restricts use of this altcoin project
Some Chinese businesses dealing with blockchain and cryptocurrencies pay their staff in USDT or other cryptocurrencies. According to Beijing Daily, a plaintiff named Shen filed a complaint with the Chaoyang Court, alleging that a network technology business paid his salary in USDT. Shen works as vice president of products in a network technology business.
According to the court, it is clearly stated in the “Labor Law” that the salary of the worker must be paid in cash. Tether (USDT) is not a currency. This is why cryptocurrencies are not considered legal cash by the government.
China wants payments in Renminbi
The “renminbi (RMB)” is recognized as legal currency in the People’s Republic of China under the People’s Bank of China Law. It makes it illegal to pay salaries in USDT. However, the China Central Cyberspace Administration, Supreme People’s Court and eleven other key departments jointly issued the “Notice on Further Prevention and Elimination of Hype Risks in Cryptocurrency Transactions” specified by the court in September 2021.
cryptocoin.com As you follow, China is a country against cryptocurrencies. The government increased its pressure on cryptocurrency mining and transactions last year. The government also does not allow trading with Tether (USDT). The court granted Shen’s request for a salary and bonus in RMB.
Renminbi (RMB)
The history of Chinese money goes back more than 3,000 years. But the official renminbi first appeared during the Chinese civil war. It was issued in December 1948 after the founding of the People’s Bank of China (PBOC) in Shijiazhuang city, Hebei province. The Renminbi is China’s official currency, the Yuan, but mostly RMB (Ren Min Bi) is used.
His view on China and altcoin projects
Since the Terra-LUNA collapse, Tether has been under constant attack. That pressure intensified after Voyager, Celsius and Three Arrows went bankrupt. Investors and hedge funds used large amounts of USDT because they believed the reserves held by these institutions were tied to Chinese commercial stock and real estate firm Evergrande. Tether’s CTO, Paolo Ardoino, did not respond to the allegations, but he had something to say in a tweet today.
1/ On stablecoins stability and liquidity.
If in a 30 days window the sum between issuances and redemptions is 0, just means money inflows from issuances will cover the one for redemptions -> not much of a proof of anything.
— Paolo Ardoino 🕳🥊 (@paoloardoino) July 6, 2022
In a tweet today, Paolo Ardoino said that Tether is able to provide liquidity to users who want to use their USDT.
However, if the net balance is negative up to -15,000 over the same period, this indicates that the stablecoin is able to return the money to consumers requesting redemption without using other customers’ funds, and can legitimately claim to have excellent liquidity.
