Despite the Chinese government banning all forms of cryptocurrency trading last year, some companies apparently still use stablecoins such as Tether (USDT) to pay their employees.
Beijing’s Chaoyang District People’s Court has ruled that stablecoins such as USDT cannot be used for wage payments, local news agency Beijing Daily reported on July 6.
The Chinese court ruled that virtual currencies such as USDT cannot circulate as currency in the market, requiring all employers to pay their employees using only the official currency, the renminbi (RMB).
The ruling came as part of a court case in which a staff member of a local blockchain firm sued his employer for not agreeing to pay his salary in RMB. The plaintiffs argued that the firm paid his salary and bonus in USDT stablecoin instead of paying him in RMB.
Citing China’s broad ban on crypto implemented in September 2021, the court pointed out that digital currencies such as USDT do not have the same legal status as legal tender. The court noted that the plaintiff’s request to pay wages and bonuses in the form of RMB fully complies with local laws and is upheld by the court.
As such, the court ordered the defendants to pay the plaintiffs a total of more than 270,000 RMB ($40,000) in wages, performance bonuses and annual bonuses owed.
As previously reported by Cointelegraph, the People’s Bank of China officially announced a series of measures to fight against crypto adoption in China in September 2021. In action 10 Chinese state authorities established a new mechanism to prevent financial players from participating in any cryptocurrency transactions.
Despite the ban, some local blockchain authorities are positive on stablecoins like USDT. Yifan He, the CEO of Red Debt Technology, a tech firm involved in China’s major blockchain project called the Blockchain Services Network (BSN) — told Cointelegraph last month that stablecoins only work well when properly regulated. needed.
“USDC or USDT are payments related currencies, not speculative assets. Once they are fully regulated, they are fine,” he said.
related: Circle’s USDC is on track to overtake Tether USDT as the top stablecoin in 2022
Tether USDT is a major stablecoin pegged to the US dollar in a 1:1 ratio, backed by US dollars held in US Treasury reserves, cash deposits and other assets.
USDT is the third largest cryptocurrency after Bitcoin (BTC) and Ether (ETH) in terms of market capitalization and the largest digital asset in terms of daily trading volume. At the time of writing, USDT has a daily trading volume of $57 billion, or 247% more than Bitcoin’s overall daily trading volume.