Can my company accept payment in bitcoin?

Bitcoin (BTC) was created in 2009 by the still-anonymous Satoshi Nakamoto as a digital currency that could be described as a “digital representation of value”. It has since become an alternative to the traditional financial system, establishing a system for performing economic transactions digitally in a way which doesn’t involve central banks or public authorities and, as a result, avoids being controlled by any country or institution.

Its use has gradually gained ground among the general population, experiencing exponential growth over the last few months. A few days ago, even reaching the once-unimaginable goal of one bitcoin was worth 60,000 US dollars.

Society’s growing interest in the use of cryptocurrencies has meant that many companies have pushed to legalise it in Spain and accept it as a payment method as a way of adapting to the inevitable digital transformation that the market will undergo. Microsoft, Expedia, KFC and Subway are just a few of the companies that accept bitcoin or other types of cryptocurrency in lieu of traditional payment methods.

Although cryptocurrencies are commonly known as digital currencies, as defined by the European Union[1], the truth is that many government bodies are hesitant to legally regulate cryptocurrencies and accept their use, something that is already widespread in countries like Germany and the United States. Thus, even though some world governments are leaning towards welcoming this new social reality with open arms and are acting accordingly, just like New Zealand, for example, by permitting bitcoin and other cryptocurrencies to be used to pay worker salaries, it’s safe to say that Spain is not one of them.

In this regard, Spain’s Supreme Court (STS, Criminal Court, no. 326/2019 of 20 June 2019) has ruled that bitcoin and other cryptocurrencies may not be considered as money or currency of any kind, reminding us that the only legal tender that can be used in the country is the euro. The Spanish Senate is fully aware of the need to regulate the situation in order to uphold legal security and prevent fraud and has pushed the government to regulate their use.

The Bank of Spain and the Spanish National Securities Market Commission (CNMV), on the other hand, have, up until now, warned of the possible risks associated with their use on several occasions. On Saturday 13 March, however, Spanish Royal Decree-Law 5/2021 of 12 March on extraordinary support measures for business solvency in response to the COVID-19 pandemic was published, in which the complexity, volatility and potential lack of liquidity that may arise from investing in this type of asset were laid bare, resulting in the modification of Royal Legislative Decree 4/2015 of 23 October approving the consolidated text of the Spanish Securities Market Law, granting the CNMV the power to control the advertising of cryptocurrencies and warn of the risk they present.

Notwithstanding the previous paragraph, the fact that cryptocurrencies still lack regulation in Spain and that they are not yet recognised as a digital currency or token does not necessarily mean that they aren’t legal. That’s why it is vital to understand that cryptocurrency is a type of digital and non-fungible movable property, and when exchanged for money or another cryptocurrency, it is considered as barter, in accordance with the definition found in Article 1,538 of the Spanish Civil Code, which reads: “Barter is a contract whereby one of the contracting parties undertakes to give an object to receive another.” 

So, after having reached this point, the key question is: can my company accept payment in bitcoin?

The truth is that doing so is entirely legal. However, you must consider that a “collection”, according to its legal definition, does not occur, but instead a barter, as stated above, and as such, the amount being exchanged will be considered property. In this sense, when issuing an invoice for the purchase (assuming that the purchaser is not exempt from paying the corresponding VAT), the product’s value must be translated into a legal currency, the euro in our case. In addition, it is also worth mentioning that companies will be in no case obligated to accept cryptocurrencies as a payment method, given that this obligation is strictly limited to legal tender.

It seems that Spain is refusing to admit that cryptocurrencies are a social reality that is here to stay, which, instead of dissuading citizens from using them, is, in fact, leading to great legal insecurity and the proliferation of several frauds becoming all too common. This is all because this lacuna in the law does not impede large and medium-sized companies from accepting them and joining the unstoppable digital revolution.

And with the CNMV receiving more powers to control cryptocurrency advertising, it’s safe to say that we’ve still got a long journey ahead of us.

[1] Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for money laundering purposes or terrorist financing.