On March 5, 2020, a French commerce court classified Bitcoin as currency during a landmark ruling.
This is according to local news outlet Les Echos that reported that the Commercial Court of Nanterre decided on February 26, 2020, to qualify BTC as a fungible, exchangeable asset just like fiat money.
The ruling was part of a dispute between French crypto exchange Paymium and alternative asset investment firm BitSpread.
According to lawsuit documents, Paymium loaned BitSpread a certain amount of BTC. When Bitcoin Cash (BCH) launched in 2017 as a result of the hard fork, and all BTC holders received BCH on a 1:1 ratio, the query arose whether BitSpread should return to Paymium exchange the BCH tokens it received from the hard fork.
Now the two parties were disputing the rights to the BCH worth over $350,000. To resolve the legal battle, the commerce court had to look into the legal status of BTC and, after classifying it as a fungible digital asset, ruled that BTC lending is a consumer loan.
Consequently, the court found that the Bitcoin Cash belongs to the borrower, just like dividends belong to shareholders.
As a result of this court decision, future cryptocurrency loan contracts could include a clause for the return of extra digital assets created by a fork.
What This Means For the Crypto Market
Many in the crypto space are excited about the good news from French court and a project that this decision will improve the situation with Bitcoin transactions and boost BTC liquidity.
For instance, lawyer Hubert de Vauplane believes that this decision now permits BTC to be legally used as currency and will, in turn, spur the number of Bitcoin transactions in France, thus turning the crypto market into a more liquid one.
“It will, therefore, facilitate Bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market.”
French Court Ruling Gives Bitcoin’s Legal Status More Clarity
The move by the French court echoes previous decisions reached by other financial courts worldwide. Japan was among the first states to clarify the legal nature of BTC in 2016 when the Asian republic officially categorized Bitcoin and digital currencies as money.
In 2018, the U.S state of Wyoming passed a ruling that would allow for crypto to be qualified as money.
Finally, in July of last year, BTC was legally recognized by a Chinese court, whereby it was concluded that the crypto should be considered digital property.