A French commerce court has classified Bitcoin (BTC) as currency during a recent trial.

Local news outlet Les Echos reported on March 5 that the Commercial Court of Nanterre decided on Feb. 26 to qualify Bitcoin as a fungible interchangeable asset that is not individualizable, simply similar fiat money.

The ruling was part of a dispute betwixt French cryptocurrency exchange Paymium and culling nugget investment firm BitSpread. Per the report, Paymium loaned 1,000 BTC (over $nine.i million every bit of press time) to BitSpread in 2022.

When holding the leased 1,000 BTC, BitSpread also got hold of 1,000 Bitcoin Cash (BCH) when the hard fork creating the altcoin was carried out in 2022. At present the two parties are disputing the rights to the BCH worth over $350,000 as of press fourth dimension.

To resolve the dispute, the court had to accost the legal nature of Bitcoin and, afterward defining it as a fungible asset, identified Bitcoin lending as a consumer loan. This kind of loan transfers ownership of the property to the borrower during the term of the loan.

The ruling has significance for the growing crypto loans sector

Because of this, the court found that the Bitcoin Greenbacks belongs to the borrower only like dividends belong to shareholders. The piece suggests that, due to this court conclusion, future cryptocurrency loan contracts could include a clause for the return of extra assets created by a fork.

Hubert de Vauplane, a specialized lawyer at constabulary firm Kramer & Levin, explained that the court conclusion could have far-reaching implications:

"The scope of this conclusion is considerable because it allows Bitcoin to exist treated similar money or other financial instruments. It volition therefore facilitate Bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market."

Confusion over the legal classification of cryptocurrencies

As Cointelegraph explained in a defended analysis piece, there is much debate on the legal definition of crypto avails, with many arguing whether they are money, commodities, securities or utility tokens. However, from time to time, official sources in various countries shine a light on the affair.

Japan was among the outset states to clarify the legal nature of Bitcoin. In early May 2022, the Asian country officially recognized Bitcoin and digital currencies as coin. Fiddling over a year agone, besides the U.s.a. state of Wyoming passed a nib that will allow for cryptocurrencies to be recognized as coin.

In July 2022, Bitcoin was legally recognized past a Chinese court, whereby it was concluded that the cryptocurrency should be considered digital belongings.