- A French court published a new decision that equates Bitcoin’s characteristics with fiat money and declares it a valuable asset.
- The decision states that Bitcoin has all the characteristics of money and allows it to be treated as a financial instrument.
A decision by the Commercial Court of Nanterre in France declares Bitcoin to be a valuable, fungible asset, comparable to fiat money. The decision is expected to facilitate transactions with Bitcoin, as reported by the french news portal Les Echos.
A positive contribution to Bitcoin’s legal status in France
As the news portal points out, the French court’s decision is unusual and falls outside the “usual jurisprudence”. In Europe and the United States the positions of major financial institutions, such as the Bank of England, the European Central Bank and the Treasury Department, are becoming more rigid. Therefore, this decision has a positive significance for trade and the nature of Bitcoin under French law.
According to the decision issued on February 26, Bitcoin enters the legal category of fiat money as it is an exchangeable, fungible and a valuable asset. The lawyer specialized in cryptocurrencies for the firm Kramer & Levin, Hubert de Vauplane, says (freely translated):
The scope of this decision is significant as it allows Bitcoin to be treated as currency or other financial instruments. It will therefore facilitate transactions in Bitcoin, such as lending or repo transactions, which are developing, and thus promote liquidity in the cryptocurrency market.
The French court published the decision due to a lawsuit between the Paymium exchange and the investment firm BitSpread. In 2014, the exchange lent a sum of 1,000 BTCs to the firm. The court was to determine what would happen to the loan after the Bitcoin hard fork that resulted in the creation of Bitcoin Cash. For this reason, the court had to reflect on the nature of cryptocurrencies and the characteristics of Bitcoin.
Although this decision is favorable for Bitcoin and its trade in France, the country follows the European Central Bank’s line of tightening. The financial institution has not recognized Bitcoin as a currency and its president, Christine Lagarde, said that Bitcoin has no intrinsic value. That line is followed by the governor designate for the Bank of England.
The bank’s representative went further and said that Bitcoin does not qualify as a currency. He also issued a warning to all Bitcoin investors. When he takes office on March 16th, the Bank of England is expected to announce stricter measures to regulate the crypto market.