French Court Recognizes Bitcoin as Currency in Landmark Case

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During a recent trial, a French commerce court classified bitcoin (BTC) as currency.

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On March 5 local news outlet Les Echos reported the Commercial Court of Nanterre would qualify BTC as a fungible interchangeable asset that is not individualized, just like fiat money.

The dispute occurred after French cryptocurrency exchange Paymium loaned 1,000 BTC to alternative asset investment firm BitSpread in 2014.

During the 2017 Bitcoin Cash hard fork, BitSpread received 1,000 BCH. The two parties are disputing the rights to the BCH, worth over $350,000 at press time.

To determine the outcome of the dispute, the court had to decide the legal nature of bitcoin.

The court categorized the asset a fungible asset and identified the lending as a consumer loan.

This type of loan transfers the ownership of the property to the borrow during the term of the loan.

Therefore, the court found that the newly created BCH belongs to the borrower, similar to dividends belonging to shareholders.

According to the Les Echos’ article, future cryptocurrency loan contracts could include an additional clause regarding potential hard forks.

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Hubert de Vauplane

“The scope of this decision is considerable because it allows Bitcoin to be treated like money or other financial instruments,” stated Hubert de Vauplane, a specialized lawyer at law firm Kramer & Levin.

“It will therefore facilitate Bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market.”

In July 2019, BTC was legally recognized by a Chinese court, whereby it was concluded that the cryptocurrency should be considered digital property.

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