This presentation will be on the legal nature of bitcoin. The following aspects will be examined: bitcoin’s fundamental features, what is considered “money” from an economic and legal perspective and the difference, if any, between bitcoin and money. A specific reference shall be made to ECB’s position, to the EU Court of Justice judgment in case C-264/2014 and to EU Parliament’s resolution of April 19th, 2018. Moreover, I will explain the effects of bitcoin’s definition as a “mean of payment on a voluntary basis” and the differences between bitcoin and fiat money with a legal tender.

1. BITCOIN FROM A LEGAL
PERSPECTIVE
Avv. Giorgio Maria Mazzoli
Vinti & Associati
COINLEX.

2. BITCOIN FROM A LEGAL PERSPECTIVE
 AVAILABLE AND ACCESSIBLE
 IN A LIMITED QUANTITY (A SCARCE DIGITAL ASSET)
 FUNGIBLE
 DIVISIBLE
 DURABLE
BITCOIN’S FUNDAMENTAL CHARACTERISTICS
COINLEX.

3.  TRANSFERABILITY
BITCOIN’S FUNDAMENTAL CHARACTERISTICS
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

4.  TRANSFERABILITY:
- BITCOIN CAN BE TRANSFERED
- THE ONLY THING YOU CAN DO WITH BITCOIN IS TRANSFERING IT TO
SOMEONE ELSE
BITCOIN’S FUNDAMENTAL CHARACTERISTICS
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

5. HYPOTHESIS:
BITCON SHARES SOME PROPERTIES OF MONEY
IS BITCOIN MONEY?
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

6. IRREDIMABLE MONEY/LEGAL TENDER – ECONOMIC CONCEPTS
CURRENCY (OBLIGATORY MEANS OF DEBTS’ DISCHARGE) – LEGAL
CONCEPT
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

7. THERE IS NO LEGAL DEFINITION OF MONEY
IN THE ITALIAN LEGAL SYSTEM
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

8. SOME AUTHORS IN LEGAL LITERATURE HAVE ALREADY RECOGNISED
THAT WITH REGARD TO MONEY IS MORE APPRORIATE TO TALK ABOUT
“AVAILABILITY” RATHER THAN ABOUT “OWNERSHIP”
“The real essence of money, since it was created to allow the exchange of goods and services
as a universal medium of exchange, is in its exchange value and, thus, in its natural ability to
circulate as a means of payment. Therefore the act of transfering (spending) money represents
its ultimate scope (destination)”
CAGGIANO - Il denaro tra proprietà e credito, le logiche dell’appartenenza
CONTRATTO E IMPRESA, 2/2009, P. 493
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

9. SOME AUTHORS IN LEGAL LITERATURE HAVE ALREADY RECOGNISED THAT
WITH REGARD TO MONEY IS MORE APPRORIATE TO TALK ABOUT
“SPENDABILITY” RATHER THAN ABOUT “OWNERSHIP”
“…the fact that money is a “medium naturally intended to circulate” may, in the abstract, also justify,
and has already determined in several legal systems, a special set of rules governing its
circulation… money needs to circulate according to rules which may grant a more immediate and
an easier transferability than that provided for other fungible goods.”.
CAGGIANO IL DENARO TRA PROPRIETÀ E CREDITO, LE LOGICHE DELL’APPARTENENZA
CONTRATTO E IMPRESA, 2/2009, P. 498
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

10. MONEY IS ONLY INTENDED
TO CIRCULATE
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

11. MONEY:
 MEDIUM OF EXCHANGE (MEANS OF PAYMENT)
 STORE OF VALUE
 UNIT OF ACCOUNT
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

12. BITCOIN:
 MEDIUM OF EXCHANGE (MEANS OF PAYMENT)
 STORE OF VALUE (?)
 UNIT OF ACCOUNT
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

13. EUROPEAN CENTRAL BANK (BCE)
“Eurosystem central banks do not recognise that these concepts [“virtual currency”
and “virtual currency schemes” n.d.r.] would belong to the world of money
or currency as used in economic literature, nor is virtual currency money, currency
or a currency from a legal perspective.”.
VIRTUAL CURRENCY SCHEMES REPORT, FEBRUARY 2015, P. 23
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

14. EUROPEAN CENTRAL BANK (BCE)
“From an economic perspective, the virtual currencies currently known about
do not fully meet all three functions of money defined in economic literature:”.
VIRTUAL CURRENCY SCHEMES REPORT, FEBRUARY 2015, P. 23
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

15. EUROPEAN CENTRAL BANK (BCE)
“From a legal perspective, money is anything that is used widely to exchange value
in transactions. The term currency is used for “minted” forms of money; nowadays
usually taking the form of coins and banknotes. In a more conceptual sense, a
(particular) currency refers to the specific form of money that is in general use within
a country. Given that VCS are not used widely to exchange value, they are not legally
money, and – in the absence of minted versions – they are not currency
either, and no virtual currency is a currency..”
VIRTUAL CURRENCY SCHEMES REPORT, FEBRUARY 2015, P. 23
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

16. UE COURT OF JUSTICE - C 264/14
“According to the Revenue Law Commission, the ‘bitcoin’ virtual currency is a
means of payment used in a similar way to legal means of payment. Furthermore,
the term ‘legal tender’ referred to in Article 135(1)(e) of the VAT Directive is used in
order to restrict the scope of the exemption as regards bank notes and coins…”
PAR. 17
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

17. UE COURT OF JUSTICE - C 264/14
“…It follows, according to the Revenue Law Commission, that that term must be
taken to mean that it relates only to bank notes and coins and not to currencies.
That interpretation is also consistent with the objective of the exemptions laid down
in Article 135(1)(b) to (g) of the VAT Directive, namely to avoid the difficulties
involved in making financial services subject to VAT.”
PAR. 17
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

18. UE COURT OF JUSTICE - C 264/14
“It must be held, first, that the ‘bitcoin’ virtual currency with bidirectional flow, which
will be exchanged for traditional currencies in the context of exchange transactions,
cannot be characterised as ‘tangible property’ within the meaning of Article 14 of the
VAT Directive, given that… virtual currency has no purpose other than to be a
means of payment”
PAR. 24
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

19. UE COURT OF JUSTICE - C 264/14
“The ‘bitcoin’ virtual currency, being a contractual means of payment, cannot be
regarded as a current account or a deposit account, a payment or a transfer.
Moreover, unlike a debt, cheques and other negotiable instruments referred to in
Article 135(1)(d) of the VAT Directive, the ‘bitcoin’ virtual currency is a direct means
of payment between the operators that accept it.”
PAR. 42
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

20. UE COURT OF JUSTICE - C 264/14
“Transactions involving non-traditional currencies, that is to say, currencies
other than those that are legal tender in one or more countries, in so far as
those currencies have been accepted by the parties to a transaction as an
alternative to legal tender and have no purpose other than to be a means of
payment, are financial transactions.”
PAR. 49
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

21. UE COURT OF JUSTICE - C 264/14
“… it is common ground that the ‘bitcoin’ virtual currency has no other purpose
than to be a means of payment and that it is accepted for that purpose by certain
operators.”
PAR. 52
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

22. EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION OF 19 APRIL 2018 ON THE PROPOSAL FOR A
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AMENDING DIRECTIVE (EU)
2015/849 ON THE PREVENTION OF THE USE OF THE FINANCIAL SYSTEM FOR THE PURPOSES OF
MONEY LAUNDERING OR TERRORIST FINANCING AND AMENDING DIRECTIVE 2009/101/EC
ART. 3, PAR. 18
«VIRTUAL CURRENCIES": A DIGITAL REPRESENTATION OF VALUE THAT IS NOT ISSUED OR GUARANTEED BY A
CENTRAL BANK OR A PUBLIC AUTHORITY, IS NOT NECESSARILY ATTACHED TO A LEGALLY ESTABLISHED
CURRENCY AND DOES NOT POSSESS A LEGAL STATUS OF CURRENCY OR MONEY, BUT IS ACCEPTED BY
NATURAL OR LEGAL PERSONS AS A MEANS OF EXCHANGE AND WHICH CAN BE TRANSFERRED, STORED AND
TRADED ELECTRONICALLY
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

23. BITCOIN ≠ MONEY/CURRENCY
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

24. BITCOIN = MEANS OF PAYMENT
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

25. BITCOIN = MEANS OF PAYMENT
ACCEPTED ON A VOLUNTARY BASIS
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

26. MEANS OF PAYMENT
ACCEPTED ON A VOLUNTARY BASIS
BITCOIN BECOMES ECONOMICALLY RELEVANT
ONLY IF AND WHEN
IT IS EFFECTIVELY ACCEPTED
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

27. BITCOIN’S VALUE DEPENDS UPON THE FACT THAT IT IS EFFECTIVELY
ACCEPTED AS A MEANS OF PAYMENT
BITCOIN TECHNOLOGY IS GOVERNED BY
CONSENSUS
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN

28. MEANS OF PAYMENT
ACCEPTED ON A VOLUNTARY BASIS
IT BECOMES RELEVANT FOR THE LEGAL SYSTEM
ONLY IF AND WHEN
IT IS EFFECTIVELY ACCEPTED
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

29. NOBODY IS OBLIGED TO ACCEPT BITCOIN AS A MEANS OF PAYMENT AS IT IS PROVIDED, WITH REGARD
TO FIAT MONEY, BY THE LEGAL SYSTEM PURSUANT TO:
• ART. 1277 ITALIAN CIVIL CODE (“PECUNIARY DEBTS SHALL BE PAID WITH MONEY HAVING A
LEGAL TENDER STATUS WITHIN THE STATE AT THE TIME OF PAYMENT AND FOR ITS NOMINAL/FACE
VALUE”)
• ART. 693 ITALIAN PENAL CODE (“ANY PERSON WHO REFUSES TO ACCEPT MONEY HAVING A
LEGAL TENDER STATUS, FOR ITS (NOMINAL/FACE) VALUE, SHALL BE SANCTIONED…”)
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

30. THE EXCHANGE OF BITCOIN DOES NOT ALLOW THE CREATION OF A DEBT
BITCOINS ARE EXCHANGED ONLY FOR A PAYMENT SCOPE
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

31. LEGILSLATIVE DECREE N. 58 OF 1998
“Means of payment are not financial instruments. ”
ART. 1, PAR. 4
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

32. BITCOIN ≠ FINANCIAL INSTRUMENT
CONSEQUENCES ON THE LEGAL DEFINITION OF
BITCOIN
COINLEX.
BITCOIN FROM A LEGAL PERSPECTIVE

33. Thank you for the attention!
Giorgio Maria Mazzoli
giorgiomazzoli@vintieassociati.com
gm.mazzoli@coinlex.it
BITCOIN FROM A LEGAL PERSPECTIVE