A Chinese court ruled that Tether USDT stablecoin can’t be used to pay salary, citing China’s blanket ban against all crypto transactions.
Despite China banning cryptocurrency transactions in 2017, some companies still use stablecoins such as Tether ( USDT ) to pay their workers.
Beijing’s Chaoyang District People’s Court ruled that stablecoins such as USDT can’t be used to pay salary, according to the local news agency Beijing Daily.
According to the Chinese court, virtual currencies such as USDT can’t circulate on the market as a currency. Therefore, all employers must pay workers in the official currency of renminbi (RMB).
This ruling was part of a case in which a worker at a local blockchain company sued his employer for refusing to pay him wages in RMB. Plaintiff argued that rather than paying him in RMB the firm had paid his salaries and bonuses in USDT stablecoin.
The court cited China’s September 2021 blanket ban on crypto and pointed out that digital currencies such as USDT don’t have the same legal status like legal tender. The court supported the plaintiff’s request for wages and bonuses in RMB.
The court ordered that the defendants pay more than 270,000 RMB ($40,000 in wages, performance bonuses, and annual bonuses to the plaintiff.
The People’s Bank of China has officially announced that it will take steps to stop crypto adoption in China by September 2021, as previously reported by Cointelegraph. The new mechanism was created by 10 Chinese state officials to stop financial players from participating in any cryptocurrency transactions.
Some local blockchain executives feel positive about USDT, despite the ban. Yifan He, CEO at Red Date Technology — China’s largest blockchain project — said last month to Cointelegraph that stablecoins could work fine if they were properly regulated.
“USDC and USDT are payment-related currencies and not speculative assets. He said that once they have been fully regulated they will be fine.
In response to the latest news about China, he noted that USDT transactions in China are illegal. The exec suggested that it may prove too difficult to ban such transactions. He stated that technically, there is no way to ban USDT payments in any country. He also said that USDT and its main rival USD Coin ( USDC ) are not popular in China.
Tether USDT, a major stablecoin, is pegged by U.S. Dollar on a 1:1 ratio. backed U.S. dollars in U.S. Treasury reserves cash deposits and other assets.
USDT is third in cryptocurrency market capitalization after Bitcoin ( TTC and Ether ( ETH). It is also the largest digital asset in terms daily trading volumes. USDT’s daily trading volume is $57 billion at the time of writing. This is 247% more than Bitcoin’s entire daily trading volume.