Rajarshi Mitra
Independent Analyst
- In a recent ruling, the French court has qualified Bitcoin as a fungible interchangeable asset that’s not individualizable, just like fiat money.
- A reputed French lawyer noted that this decision by the court will favor the liquidity of the crypto market.
According to a recent local French news report, the Commercial Court of Nanterre has decided to qualify Bitcoin as a fungible interchangeable asset that’s not individualizable, just like fiat money. This ruling was a part of a dispute between Paymium, a French crypto exchange, and BitSpread, an alternative asset investment firm. Paymium reportedly loaned 1,000 BTC (over $9.1 million as of press time) to BitSpread in 2014.
While holding these loaned 1,000 BTC, BitSpread also got hold of 1,000 Bitcoin Cash (BCH) when the hard fork creating the altcoin took place in 2017. The two parties are now disputing over the rights to the BCH, which is worth more than $350,000.
To resolve the dispute, the court had to define the legal nature of Bitcoin and after classifying it as a fungible asset, it identified BTC lending as a consumer loan. A loan of this nature transfers ownership of the property to the borrower during the term of the loan.
The court has ruled that the Bitcoin Cash belongs to the borrower just like dividends belong to shareholders. Hubert de Vauplane, a specialized lawyer at law firm Kramer & Levin, said:
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.
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