Are Merchants Allowed to Accept Bitcoin as a Means of Payment?

(For German version click here)


In the last couple of months, Bitcoin gained attention primarily as a very attractive investment opportunity. At this point in time, not only a few adventurous private investors, but also more and more institutional investors such as investment funds and investment banks invest in the best-known cryptocurrency. Even though Bitcoin is currently recognized as the hottest investment asset of the hour, the originally described and intended application for Bitcoin in Satoshi Nakamoto’s whitepaper was the creation of an alternative electronic means of payment that functions in a decentralized manner and does not require a central settling institution. This originally intended application has not been completely forgotten. Elon Musk for example announced that his company Tesla, which caused a stir by investing 1.5 billion dollars in Bitcoin earlier, intends to accept Bitcoin as a payment for Tesla automobiles in the future. But what legal obstacles do traders face, if they intend to accept Bitcoin or comparable cryptocurrencies as a means of payment for their goods and services?

Payment with Bitcoin Only Possible if Merchant and Customer Consent

From a private law point of view, it first has to be noted that Bitcoin does not have the status of a legal tender in Germany. According to the German Central Bank Act, legal tender, which can always be used to settle financial obligations due to legal order, are exclusively coins and banknotes denominated in euros. The payment of goods and services with Bitcoin is nevertheless possible under German private law, if both parties of a contractual relationship agree that a Bitcoin payment shall have the effect of settling the payment obligation. On the other hand, a customer has no possibility to force a merchant to accept Bitcoin instead of euros as a payment. An effective payment in Bitcoin from a civil law point of view therefore requires that the merchant and his customer validly agree on the exchange of Bitcoins for goods contractually.

Acceptance of Bitcoin as a Payment Generally not Subject to Authorization

Merchants offering their customers the option to pay in Bitcoin for their offered goods or services generally do not require a prior authorization from BaFin for this activity. The mere acceptance of Bitcoin as a means of payment is possible without an authorization because the acceptance of Bitcoin does not constitute a banking business or a financial service. However, according to the administrative practice of BaFin the acceptance of Bitcoins as a means of payment may be associated with activities that require prior authorization, if the merchant offers additional services to the customer which are considered as a banking business or a financial service pursuant to the German Banking Act.

Subsequent Trading Activities as Regulated Proprietary Trading

In case of accepting Bitcoin as a means of payment, merchants will regularly face the question of how to commercialize the received Bitcoins in order to turn them to their business account. In most cases, the employees of the merchant want to be paid in euros and not in Bitcoin. Additionally, facility rents and other operation expenses will usually only be payable in euros. This is obviously always the case for tax payments to the German tax authority. Bitcoin stocks will therefore have to be exchanged by merchants to euros on a regular basis. This activity under certain circumstances may constitute proprietary trading, which would be subject to a prior authorization requirement from BaFin. However, the obligation to obtain authorization will only be triggered if the volume of the trading activities reaches a significant volume and a regular frequency. An obligation to obtain authorization will therefore be avoidable in most cases with a diligent planning.


Attorney Lutz Auffenberg, LL.M. (London)




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