China’s Civil Code Opened a Wider Path for Crypto Inheritance

China’s National People’s Congress adopted the country’s Civil Code on May 28, 2020, placing lawful digital property inside a broader framework for civil rights and inheritance. The code was scheduled to take effect on January 1, 2021.

For cryptocurrency holders, the significant change was not an explicit declaration that Bitcoin was legal tender or freely tradable. The enacted text did not name Bitcoin or cryptocurrency. Instead, it combined a general rule concerning online virtual assets with a substantially broader definition of what could constitute a deceased person’s estate.

That distinction made the legislation consequential but easy to overstate. It strengthened the legal basis for arguing that lawfully held digital assets could pass to heirs; it did not settle every question about asset classification, account access, custody or the validity of a particular cryptocurrency transaction.

What the code actually established

Article 1122 defined an estate as the lawful personal property left by a natural person at death. It added that property which could not be inherited under law, or because of its nature, remained outside the estate.

This general formulation replaced the earlier Inheritance Law’s enumerated approach, which listed categories such as income, houses, savings, household articles, trees, livestock, books and specified intellectual-property interests. A general definition was better able to accommodate property forms that did not fit an older statutory list.

Article 124 separately provided that a natural person had a right to succession and that lawfully owned private property could be transferred through inheritance. Article 127 directed that laws specifically providing for the protection of data and online virtual assets should be followed.

Article 127 itself was not new on May 28. Substantially the same language had appeared in China’s General Provisions of Civil Law adopted in 2017. The important event-date development was the assembly of that virtual-property provision with the new code’s comprehensive succession rules and broader estate definition.

The cryptocurrency interpretation

Contemporaneous cryptocurrency reporting treated the vote as opening inheritance to Bitcoin and other virtual currencies. Cointelegraph reported on May 28 that Renmin University law professor Yang Lixin had told China Central Television that the new estate language meant internet property and virtual currency could be inherited.

That was an attributable legal interpretation, not language appearing verbatim in the code. The enacted provisions required the property to be lawful and preserved exceptions created by other laws or by the nature of the asset. Whether a particular token, exchange balance or contractual account qualified could therefore depend on additional rules and case-specific facts.

The code also addressed legal entitlement, not technical possession. An heir might establish a right to cryptocurrency yet remain unable to obtain it if private keys, passwords or custody instructions were unavailable. Conversely, possession of a private key would not by itself resolve competing inheritance claims. Blockchain control and civil-law ownership were related but separate questions.

Why the development mattered

The vote gave courts, families and estate administrators a more adaptable statutory framework for property that existed only in digital form. That mattered as cryptocurrency ownership exposed a mismatch between conventional succession procedures and assets controlled through cryptographic credentials or online intermediaries.

The legislation did not reverse China’s existing restrictions on cryptocurrency fundraising or exchange activity, authorize banks to handle Bitcoin, or grant cryptocurrency legal-tender status. No market-price or trading-volume claim can be reliably attributed to the Civil Code vote from the sources reviewed.

The strongest event-day conclusion is therefore limited: on May 28, 2020, China adopted a code whose broad estate definition made lawful virtual assets more capable of being treated as inheritable property, while leaving classification, legality and access questions unresolved.

Later clarification

On August 25, 2020, the Cyberspace Administration of China republished a Supreme People’s Procuratorate discussion of virtual-property inheritance. The article cited Articles 127 and 1122 and described the broader estate definition as a signal that virtual property could be recognized as inheritable. It also acknowledged continuing disputes and case-by-case uncertainty. That later institutional explanation clarifies the May 28 text but was not available when the code was adopted.