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France Commercial Court allotted Bitcoin the status of the Fiat Currency

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Jayashree Ingle Follow

INDIA

Mar, 12 2020

Mar, 12 2020

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As an outcome of a legal battle between France’s local Crypto exchange Paymium and an alternative investment startup BitSpread, the French Commercial Court listed the Bitcoin as a similar currency.

So, as per the verdict, Bitcoins henceforth will be seen as legal money in France. Also after this judgment, the loan contracts will now be having this extra clause about the ownership rights of the crypto assets created out of hard forking.

Legal Status of Bitcoin same as Fiat currency

Local media reported that the commercial court at Nanterre has acknowledged Bitcoin as a fungible intangible asset similar to fiat currency while hearing the ownership dispute between the two firms.

While expressing his opinion on the verdict, one of the special lawyers at Kremer and Levin lawyers Hubert De Vauplane quoted, “The scope of this decision is substantial because it distinguishes Bitcoin to be treated like money or other financial instruments. It will, therefore, facilitate Bitcoin transactions such as lending or repo transactions that are growing and thus favor the liquidity of the cryptocurrency market.”

The verdict is an outcome of the dispute between French cryptocurrency exchange Paymium and alternative asset investment firm BitSpread. As per the report, Paymium lent 1,000 BTC (over $9.1 million) to BitSpread in 2014.

The dispute between Paymium and BitSpread 

In 2014 Paymium had loaned the 1000 BTC to BitSpread. After a Bitcoin hard fork event in 2017, Bitcoin Cash had been created as a new Altcoin, causing BitSpread to hold an additional 1,000 BCH worth of $ $350,000. Upon the ownership rights of this additional BCH, dispute had been ignited between the two parties.

To resolve the dispute, the court had to redefine the definition of Bitcoin as a fungible asset that certifies Bitcoin as a consumer loan. As per the French financial laws, this kind of ownership transfers the ownership rights to the borrower during the term of the loan.

France’s Proactive crypto-favorable Stance

So far, France has shown a positive approach, by offering various incentives and rating cryptocurrencies. In 2019, the government has announced its plans to proper regulatory Framework for ICOs.

It also had removed the taxes on cryptocurrency transactions to accelerate the cryptocurrency investment. But simultaneously clear that taxes will be levied to the digital assets turned to fiat currency.

Furthermore, the financial regulatory of France The Autorite des Marches Financiers or the French Financial Markets Authority (AMF) has given the permission and the license to Napoleon Asset Management, to launch the first regulated Bitcoin fund.

Classification of Cryptocurrencies across the world

There is a difference of opinion about the classification of crypto assets across the globe whether they should fall under currency commodities or securities. Various countries are clarifying their legal stand about the categorization of crypto-assets to mitigate this confusion and ambiguity.

Japan is the front runner in legalizing the Bitcoin (BTC) as a fiat currency in May 2016. Recently Wyoming State of the United States has passed a ruling which recognizes cryptocurrencies as money. In July 2019, Bitcoin was legalized as digital property by the Chinese court in China.

#Bitcoin #cryptocurrencies #France


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Jayashree Ingle

CBW - External Analyst

INDIA

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