French Commerce Court Draws Parallel Between Bitcoin & Fiat Currency
Bitcoin (BTC) has been endorsed as currency by a French commerce court in recent legal proceedings, according to domestic news outlet Les Echos.
Specifically, the Commercial Court of Nanterre has called Bitcoin as a fungible exchangeable asset that cannot be individualized like fiat money.
The decree was portion of a lawsuit between French cryptocurrency exchange Paymium and alternative asset investment company BitSpread.
According to the report, Paymium gave a loan of 1,000 BTC (more than $9.10 million) to BitSpread in 2014.
At the time of holding 1,000 BTC received via loan from Paymium, BitSpread was awarded 1,000 Bitcoin Cash (BCH), when the latter was created through hardfork of Bitcoin in 2017.
Both parties went to court claiming they are the rightful owner of BCH worth more than $350,000.
To solve the issue, the court had to define the legal class of Bitcoin. The court, after recognizing it as a fungible asset, categorized Bitcoin credit as a consumer loan. This implies change of ownership of the asset in the name of borrower during the loan term.
Consequently, the court decided that the legal owner of Bitcoin Cash is the borrower as it is similar to dividends paid to shareholders. The court judgment indicates that loan agreements related to cryptos could certainly include a condition calling for returning additional assets created through a fork.
Hubert de Vauplane, an advocate at law firm Kramer & Levin, detailed that the court decision would have significant repercussions:
“The scope of this decision is considerable because it allows Bitcoin to be treated like money or other financial instruments. It will therefore facilitate Bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market.”
There is no unanimous view as to whether cryptos are commodities, money, securities or utility tokens.
Despite these issues, once in a while, government organizations in several countries provide some sort of clarity to the subject.
Japan turned out to be the first country to explain the legality of Bitcoin. In May 2016, the Asian country officially endorsed Bitcoin and cryptocurrencies as money.
More than a year ago, the US state of Wyoming passed a bill that permits cryptos to be accepted as money.
Back in July last year, a Chinese court recognized Bitcoin by concluding that the numero uno crypto should be categorized as digital property.