On February 26, the Nanterre Commercial Court qualified the lending of bitcoin as a consumer loan, as defined by article 1892 of the French Civil Code. This decision gives a legal qualification to the oldest cryptocurrency, considering bitcoin to be a fungible and consumable intangible asset.
Bitcoin recognized as a fungible intangible asset
The Nanterre court has ruled that bitcoin is a fungible intangible asset, i.e. an interchangeable but non-individualizable asset, just like money. Moreover, bitcoin is considered to be consumable: whether used to pay for goods or services, to lend or exchange for currency, bitcoin is "consumed" when it is used, in the same way as legal tender, "even though it is not legal tender", says the ruling.
As a result, when bitcoin is borrowed or lent, it becomes a consumer loan, requiring the same quantity and quality to be returned. This decision marks a step forward compared to the PACTE law, which only gave a generic definition of these digital currencies.
Article 86 of the law on business growth and transformation, known as the PACTE law, thus designates as a digital asset "any digital representation of value that is not issued or guaranteed by a central bank or public authority, that is not necessarily attached to a legal tender and that does not have the legal status of a currency, but that is accepted by natural or legal persons as a means of exchange and that can be transferred, stored or exchanged electronically."
A decision taken in the context of litigation
This decision was taken by the Nanterre Commercial Court in the context of a dispute between Paymium, a French cryptocurrency exchange platform, and BitSpread, an English financial advisory firm.
In 2014, Paymium lends 1,000 bitcoins to BitSpread. In 2017, bitcoin underwent a hard fork, from which a new cryptocurrency, bitcoin Cash, was born on a one-for-one basis. According to Paymium, BitSpread received bitcoin Cash in respect of the bitcoins it held on the day of the split, and is claiming their return, i.e. 1,000 bitcoins and 1,000 bitcoin Cash. In 2017, BitSpread returned the 1,000 bitcoins initially loaned to Paymium, but Paymium also claimed the Cash bitcoins resulting from the hard fork.
The Nanterre Commercial Court rejected Paymium's request to receive the 1,000 bitcoins Cash, but at the same time ordered BitSpread to pay Paymium 100,000 euros in repayment of a loan and 42 bitcoins Cash in interest. Paymium, for its part, must release the 53 bitcoins Cash frozen in BitSpread's account as a precautionary measure.
As a bitcoin loan is considered by the court ruling to be a consumer loan, the risks are borne by the borrower, but he is also the beneficiary of any fruits of the loan.