Earlier this week, a Dutch court described bitcoin as a transferable value during a case that requested Koinz Trading BV to pay mining proceeds worth $5,000, or 0.591.
The court explicitly stated that property rights apply to bitcoin, given that as a cryptocurrency, it is able to transfer value in a peer-to-peer manner. The court went on to note that the cryptocurrency is a legitimate transferable value.
“Bitcoin exists, according to the court, from a unique, digitally encrypted series of numbers and letters stored on the hard drive of the right-holder’s computer. Bitcoin is ‘delivered’ by sending bitcoins from one wallet to another wallet. Bitcoins are stand-alone value files, which are delivered directly to the payee by the payer in the event of a payment. It follows that a Bitcoin represents a value and is transferable. In the court’s view, it thus shows characteristics of a property right. A claim for payment in Bitcoin is therefore to be regarded as a claim that qualifies for verification,” the court document translated by Cointelegraph read.
In the US, cryptocurrencies are considered as commodities, at least by the US Commodities and Futures Trading Commission (CFTC). In Japan, the government acknowledged cryptocurrencies as a legal currency, allowing citizens and businesses to utilize cryptocurrencies to send and receive money. In the Philippines, cryptocurrencies are seen as a remittance method, that provides an efficient method for transaction settlement.
Generally, while cryptocurrencies as a whole are considered as different types of assets or money, they are considered legitimate by most governments. The Dutch court, if it had decided cryptocurrencies was not a legitimate transferable value, it would have requested the company to pay the proceeds in Euros. However, that was not the case, as the court specifically ordered the business to pay 0.591 bitcoin to the petitioner.
In many regions, the legality of bitcoin still remains unclear. In India for instance, the government has offered no additional information apart from an ambiguous message that bitcoin is neither legal or illegal. Consequently, businesses have integrated their own Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, to stay compliant with the country’s existing regulations on financial companies, which can highly impractical and costly.
However, in Europe, at least within the EU, bitcoin is considered as an asset and a transferable value. In the recent G20 Summit, an international forum participated by the 20 leading economies of the world, global financial watchdog Financial Stability Board (FSB) emphasized that cryptocurrencies like bitcoin are considered assets, and they do not pose danger to the stability of the global financial industry.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system,” read the statement of the FSB.
Conclusively, if the global cryptocurrency market and businesses within it continue to function as a strictly regulated market with compliant businesses, cryptocurrencies like bitcoin will always be considered as legitimate assets.
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Last modified: March 4, 2021 5:05 PM