Corporate News

Bitcoin as legal tender

Two countries currently have Bitcoin as their legal tender, namely El Salvador and the Central African Republic. With the increasing popularity of digital currencies, it may be that using Bitcoin as a form of payment may become more common place. However, it remains to be seen whether cryptocurrencies can be deemed valid consideration (namely of economic and legal value) for business contracts, given its unstable nature.

The economic value of Bitcoin is controversial as some still consider it concerning due to its high volatility – for example, the Bank of England found that while the GBP only fell 7% after the EU referendum, Bitcoin went up by 65% in just one day. Such unpredictability could ultimately undermine the value of this currency and therefore the utmost caution would be needed if it were to be used as consideration in legally binding contracts.