A Chinese court has ruled against salary payment using Tether USDT stablecoin as illegal citing the government’s ban on all types of cryptocurrency transactions last year.
According to the local news outlet Beijing Daily, the Chaoyang District People’s Court in Beijing has decided that stablecoins like USDT cannot be used for wage payments.
Due to the Chinese court’s ruling that virtual currencies like USDT cannot be used as legal tender in the country, all employers are now only permitted to pay their employees in renminbi, the national currency (RMB).
The decision was made as a result of a lawsuit filed by a worker at a local blockchain company against his employer for refusing to pay his wages in RMB. The suit claimed that the business had paid his salary and bonuses in the USDT stablecoin rather than RMB.
The court emphasized that virtual currencies like USDT do not have the same legal standing as legal cash, citing China’s comprehensive prohibition on cryptocurrencies that went into effect in September 2021.
The plaintiff’s request to receive salary and incentives in RMB completely complies with local legislation, and the court approves it, the court stated.
As a result, the court-mandated that the defendants pay the plaintiff a total of over 270,000 RMB ($40,000) in salaries, performance bonuses, and annual bonuses.
Stablecoins situation in China
Some local blockchain executives are supportive of stablecoins like USDT despite the restriction. should be successful only if properly controlled, according to Yifan He, CEO of Red Date Technology, a tech company involved in China’s significant blockchain initiative dubbed the Blockchain Service Network (BSN). He made this statement to Cointelegraph last month.
“USDC or USDT is not speculative investments, but rather currencies associated with payments. They are fine once they are adequately regulated, he said.
Considering the most recent reports from China, He mentioned that all USDT transactions in China are forbidden. The executive said that regulators might find it too difficult to forbid such transactions.
Technically, He explained, there is no mechanism to prohibit USDT payments in any nation. The expert further asserts that USDT and USD Coin (USDC), its main rival, are “not at all popular in China.”
