Cryptocurrencies as a payment method in the Vienna Convention on international sales of goods

Andreea Bărnuț
Andreea Bărnuț


Throughout the years, several efforts prior to the latest implementations of cryptocurrency failed to achieve mainstream momentum. These contain concepts from the Netherlands and the United States in the early 1980s. Digicash, which collapsed within the 1990s, may have been the primary notable digital currency. Later, PayPal and rivals emerged, taking a blended approach to financial transfers in existing currencies. These companies continue to play a significant role in online and international trade. With this rich history behind it, it comes as no surprise that the need for a decentralized, purely electronic coin was met through the invention of Bitcoin.

Nowadays, it can no longer be thought of Bitcoin as a niche payment method used only for ransomware, it might be surprising to find out that in the 13 years since its inception, it has become so popular that it can be used to pay taxes or get it included in the pension in some countries, buy it from a ticket machine at a Swiss train station, or even buy a cup of coffee with it.

It is clear to see that Bitcoin paved the way for many other cryptocurrencies and alternatives to them, but which are meant to offer the same advantages. Banks and financial institutions are looking at using Bitcoin’s underlying blockchain technology to create new asset categories and streamline and improve the reliability of their processes. Meanwhile, tech titans like Facebook are launching their own virtual currency. Governments all over the world are competing to be the first to implement a fully viable national blockchain-based digital currency.

Taking all of this into account, it is fair to conclude that cryptocurrencies have flipped not just the currency structure, but even the foreign trading system on its head.

To understand how and why cryptocurrencies play a significant role in today’s culture and financial system, it is important to know how they were created, how they operate and how are they being used, as well as the advantages and disadvantages they bring with them.

Bitcoin is based on blockchain technology, which the Bitcoin Foundation refers to as a “triple-entry” bookkeeping method. Each time a new transaction takes place, the sender, recipient, and a third party must both validate and agree on it. A Bitcoin transaction is documented in a “blockchain,” which is a triple-entry digital record where every Bitcoin transaction can be identified.

Any transaction to a particular Bitcoin wallet is traceable, but it cannot be known with certainty who owns the wallet, this allows for a blend of trust and confidentiality. That is a true desiderate for privacy activists, but it can be difficult for anti-terrorism and anti-money-laundering authorities who want to monitor digital currency transfers all around the world to prevent criminal activities.

Organizations, laws, hidden data centers, and firewalls do not protect Bitcoin. Bitcoin is protected by its code and does not require any additional security measures.

Before this time, companies used to keep their source code concealed. The logic was that the more information a hacker had on how the system operated, the more likely they were to be able to crack it. Throughout many instances, this is accurate, but it also means that consumers and regulators must rely on the skills of a small group of developers who happen to be working on the bank’s software. This theory was turned upside down by Bitcoin and other open-source cryptocurrencies. If anyone can view the network transactions in real-time, analyze the code, and even add to the code, the network can be continuously checked by anyone who is involved, not just a small group of developers working for one corporation.

In the case of Bitcoin, it’s important to keep in mind that there will only be 21 million bitcoins generated, and the amount mined is expected to drop significantly over time. Even if the last Bitcoin is predicted to be mined in 2140, more than two-thirds of all tokens that will ever be generated already are in existence. This is an important factor in the argument of the high volatility of the cryptocurrency because, it there’s a maximum amount of coins, eventually, at a certain point in the future, and taking into consideration the gradually understanding of its mechanism, Bitcoin will surely become a more secure, from the financial point of view, as well as a more stable coin.

Black markets, such as Silk Road, became the first large users of bitcoin after early “proof-of-concept” purchases. Silk Road only accepted bitcoins as payment for the first 30 months of its life, starting in February 2011, and transacted 9.9 million bitcoins worth $214 million. This fact was specifically problematic for authorities given the fact that Silk Road was an online black market, best known as a platform for selling illegal drugs[1].

To the present day, the cumulative valuation of all bitcoins, known as the “market cap,” reached $1 trillion. Despite the popularization, the currency is still extremely unpredictable, with large fluctuations in price occurring often during brief periods of time[2].

Bitcoin is by far not the sole cryptocurrency on the market. Other currencies based on the same blockchain technology were launched as its prominence grew. Ethereum, the second-largest market cap in the crypto market, is the most notable Bitcoin competitor. However, there are plenty to pick from[3]. Despite the numerous alternatives, it’s safe to say that the amount of cryptocurrencies and digital tokens that have some real value is in the low double digits. The cryptocurrencies that are exchanged sufficiently to provide actual liquidity or are actively used to pay for usage of a blockchain platform with utility tokens fall within this smaller category. Some of the most popular cryptocurrencies among traders, besides Bitcoin and Ethereum, are Ripple XRP, Litecoin, NEO, and IOTA[4].

It is important to acknowledge that decentralized, highly volatile cryptocurrencies are not the only solution. Understanding the necessity existent in the society, after Bitcoin rose to almost $20,000, then fell by more than 50%, different actors, such as JP Morgan or even Facebook, started to develop Stablecoins[5].

A stablecoin is a cryptocurrency designed to reduce the volatility the buyers face while trading cryptocurrency. Stablecoins are usually pegged to another stable commodity (e.g., gold, real estate, or fiat currencies), but they may also be backed by an algorithm. Some examples of the best stablecoins right now are Tether, TrueUSD, Paxos Standard (PAX), and USD Coin (USDC).

The stablecoins present all the advantages of a decentralized coin while avoiding the high volatility factor, so it is a better alternative if one is not interested or willing to take the risk on the value of the coin that he/she is buying.

Having understood what cryptocurrencies are, it is time to analyze what is their role in today’s economy. Their acceptance came gradually, first being embraced by the people and slowly but steadily making their way on the national and international scale. Shortly after this came the necessity for the authorities to express their point of view on the matter.

Cryptocurrencies, such as Bitcoin, are a medium of exchange protected through cryptography. The term “medium of exchange” is just yet another way of saying “money.” To comprehend what cryptocurrencies are and how they are being used in markets and our everyday lives, it is essential to first consider what money is at the most philosophical level.

The shift from precious metals towards trust-based currencies is almost as drastic as the discovery of money itself, and it has sparked decades, if not generations, of heated debate.

Over the years, society has progressed from a system in which the currency itself has value (gold or silver coins), to a system of promissory notes that could be exchanged for gold or silver, to the fiat money system we use nowadays, which is supported by nothing but the confidence in governments. Fiat currency – Latin for “money by decree” – does not necessarily have to be distributed by governments and can be anything that is accepted as legal tender by consenting parties, although in reality it usually refers to government-issued currencies.

However, the concept of non-state-issued currencies is a curious one that refuses to die. In the end, it all comes down to whether the money is available, or whether people are willing to receive it as payment.

The lack of control is a thorn in the side of state authorities for many reasons: not only that assets may not be taxed appropriately and consumer protection laws can be flouted, but also that, in the worst-case scenario, capital can easily flow from one country to another without the knowledge or permission of the governments, which is not only a regulatory nightmare for taxation, anti-money laundering and anti-terrorism finance, but also calls into question the authority of states in terms of fiscal and monetary control.

The blockchain enables open, auditable, secure, immune to alteration, and trustworthy financial transactions since it is freely hosted on a vast number of nodes (participants), uses cryptography (cryptographic hash) and holds timestamped historical records. Opponents of cryptocurrency, on the other hand, contend that all of these characteristics are suspicious.

The EU’s adoption of the AML D5 (Anti Money-Laundering Directive)[6], which was released in June 2018, had the ultimate objective to align EU countries with US legislation, and whilst the specifics of how each Member State can enact the directive are left to local legislators, it is likely to have a significant effect.

To see whether cryptocurrencies should be considered currencies, it has to be analyzed if they fulfill the traditional roles of money; As a medium of exchange, although their adoption is currently small, cryptocurrencies may act as a medium of exchange on certain levels. Cryptocurrency may be used to do business within any two parties. If they so choose, they can use any other method. Money is not the only means of trade, and parties are free to use any medium they choose, such as bottle caps or pebbles.

According to a study conducted by Zogby Analytics, 36 percent of small businesses in the United States embrace cryptocurrency as a form of payment, with 59 percent of those businesses still purchasing digital currency for their usage[7]. AT&T, Namecheap Overstock, Expedia, Badoo, Subway, Newegg, Shopify, Microsoft, Norwegian Air, among others are some of the well-known companies that accept cryptocurrency[8]. In 2018, WeMakePrice, South Korea’s biggest e-commerce site with a $400 million annual turnover, partnered with Bithumb, the country’s largest cryptocurrency exchange, to accept 12 cryptocurrencies, including Bitcoin, Ethereum, and Litecoin[9].

We may differentiate countries that control the status of cryptocurrencies from countries that leave this area unregulated in terms of policies and legality. Since there are no strict rules, cryptocurrencies are normally not illegal in that country and must be handled according to established laws.

The United States, the European Union, Japan, the United Kingdom, Canada, Australia, and South Korea are among the countries that recognize cryptocurrency as a form of payment[10]. Typically, these countries do not regard cryptocurrencies as legal tender (as money), but rather as a product, asset, protection, land, or similar, and as such, they are subject to capital gain taxes, implying that taking cryptocurrencies as a form of payment, entailing additional and complex bookkeeping[11].

Numerous issues arise when looking at the relationship with the Vienna Convention on International Sales of Goods and cryptocurrencies. These issues are often regarded as theoretical at the moment, but realistic issues may need to be addressed in the immediate future. The nature of cryptocurrencies must be outlined from the perspective of the CISG, in order to determine if it is a contract of sale of goods when the buyer offers a certain cryptocurrency as payment.

Where traders purchase Bitcoin for Euro in foreign exchange, the transaction is considered beyond the scope of the Convention, notwithstanding the fact that Bitcoin has been declared as a mode of payment or currency. As previously said, it is impossible to classify it as goods or tangible property, and therefore making it intangible, it is often outside of the CISG’s scope of application, much as software and goodwill are treated in consistent court decisions; however, there are differing viewpoints in the letter[12]. If Bitcoin is to be used as a counter value – for a certain good, such as a machine – sold in an international back-to-back deal, the response is different. Accepting Bitcoin as payment is an international selling of goods exchange in this situation, and the CISG applies. On the other case, if Bitcoin is considered a good in itself, it is a barter deal that falls beyond the scope of the Convention.

Although the differing views, it is fair to define Bitcoin-based and related transactions as sales of products and Bitcoin as money under the CISG, taking into account the role of Bitcoin, as well as the conduct and purpose of the contracting parties. It is undeniable that Bitcoin is a unique type of currency, and we must not ignore that, not so far ago, the banknote was regarded as a suspicious and unusual novelty.

Article 6 of the Convention can resolve the question of whether a sales of goods contract with a price specified in cryptocurrency is still a sales of goods contract under the CISG. Even if we assume that cryptocurrencies are not a legal payment mechanism, we might argue that the parties have the ability to derogate from or alter the CISG under article 6. A CISG derogation or modification can take many different forms. The parties may, for example, designate a domestic law as the applicable law to their contract, thereby altering Article 7(2) CISG. They might, for example, agree on supplementary contract provisions or trade terms like INTERCOMS. Alternatively, they may substitute the provisions of another set of regulations for specific sections. They may even just strike out specific clauses. They can, for example, eliminate Article 72 without agreeing on any other legislation or provisions, leaving the relevant law to be determined by the applicable norms of private international law. The possibility of opting-in to the CISG is not addressed directly in the Convention’s wording. The conflict of laws regulations of the forum governs whether the CISG can be chosen as the relevant law in contracts that would otherwise be regulated by something else.

In conclusion, taking into account the scope of the convention and the clarifications presented above, it is clear to see that using cryptocurrencies as a method of payment does not represent a different contract from that of the sales of goods and is still to be governed by the CISG.

Cryptocurrencies are mainly considered dangerous – causing a high reticence of the average people, who are not acquainted with the idea and mechanics behind them – because of the volatility. Cryptocurrencies still being an emerging market, their purely digital nature, as well as the not yet really developed at its true potential technology are some of the factors that are causing this volatility[13].

By avoiding setting the price, one can be shielded from large exchange rate fluctuations. In this case, the CISG provides guidelines in Article 55 that apply when a contract is validly concluded but does not expressly or implicitly fix or provide provisions for determining the price; the parties are presumed to have implicitly made reference to the price generally charged at the time of the contract’s conclusion for such goods in the absence of any indication to the contrary. The core issue is that the CISG applies to the price paid at the time of contract conclusion in this Article, while the drastic change in Bitcoin’s valuation could have occurred shortly afterward. However, nothing prevents the seller and the buyer from agreeing to a price that is the same as the one paid at the time of sale, based on the principle of the freedom of contract. Alternatively, the US Commercial Code (UCC) §2305 follows this model when it comes to open price terms.

The CISG would not address the issue of hardship. In the event of an internal gap, questions relating to matters governed by the CISG that are not expressly resolved in it must be solved in accordance with the general principles on which it is based; in the event of an external gap, that is, the lack of such general principles, they must be resolved in accordance with the law applicable under private international law rules, according to Art. Article 7, Subsection 2 of the Convention.

Hardship refers to cases in which the surrounding conditions shifted substantially after the contract was concluded, making the debtor’s execution of the contract excessively burdensome. Extreme shifts in the selling price for products to be procured and sold by the seller are the most relevant situations in which this definition is addressed. Dealing with such situations under Article 79 of the CISG is the safest option.

“The promisor is exempted under Article 79 if the failure to perform is due to (a) an impediment which is beyond his control, (b) unforeseeable, and (c) unavoidable in the sense that the promisor could not reasonably be expected to avoid or overcome the impediment or its consequences.”

i. Impediment beyond control

Just an impediment that is outside the promisor’s reach qualifies for exemption under Article 79 of the CISG. The concept of “impediment” was introduced to ensure a clear and objective interpretation of the conditions of the exemption. As a result, only objective situations that prevent performance, such as those that are external to the promisor, may be called impediments under Article 79. External situations or circumstances of the external sphere, which involves the object of the obligation, may also be included in this situation. The counterpart is a collection of personal conditions that hinder the promisor’s ability to perform. The contractual division of risks is the primary way of distinguishing between the promisor’s field of risk and external impediments. Additionally, customs and usages must be considered. In other ways, the extent of the promisor’s responsibility can be determined by his usual risk sphere. Responsibility for his own domain, such as his financial capability or personal conditions, acquisition risk, utility risk, and accountability for his own employees are all traditional spheres of risk of the promisor.

Because of Article 79’s broad exception, an exempting impediment may be either a previous or subsequent impediment, objective or subjective, induced by the promisor’s negligence or without his fault, immediate or permanent. As a result, even if the statute otherwise applicable to the contract voids a guarantee that is objectively impossible to perform from the start, the effects of initial impossibility should still be decided exclusively under the Convention. However, the possibility that the promisor intended to assume full responsibility for his original capacity to execute, thereby removing the application of Article 79, would have to be decided on a case-by-case basis.

ii. Unforeseeability of the impediment

Although if impediments outside his area of influence are beyond his control, the promisor is liable if he might fairly have been required to consider them at the time of the contract’s conclusion. The deciding consideration is whether a reasonable person in the promisor’s position should have foreseen the impediment’s original or subsequent nature under the current circumstances at the time of the contract’s conclusion while also taking into account trade practices. If the impediment was inevitable at the time the contract was concluded and the promisor had no reservation about it, he should be considered to have accepted the possibility that performance would be postponed or stopped as a result of the impediment.

iii. Unavoidability of the impediment and of its consequences

Even though the promisor may not have considered the impediment or its implications before concluding the deal, he is still liable if resolving the impediment or its consequences is both possible and reasonable for him. In this regard, international trade regulations must be extremely stringent. In most cases, the promisor will be required to resolve an impediment in order to complete the deal in an agreed-upon way, particularly though it means incurring significantly higher costs or even a loss as a result of the agreement. Depending on the circumstances, the promisor will be required to include a reasonably valid alternative that meets the contract’s objectives. In this situation, however, the promisor must comply with any objections raised by the promisee and give him notice in compliance with Article 79 Paragraph 4. The extent and nature of the promisor’s attempts to resolve the impediment or its conditions in specific situations must, once again, be calculated solely by the contractual assignment of risks.

iv. Causation of non-performance

The promisor’s exception under Article 79 specifies that the inability to perform is due solely to an unforeseeable and insurmountable impediment. However, if the promisor’s breach of contract is a contributing factor in the failure to perform, the promisor is still responsible. Similarly, the promisor is not immune from liability if, once delivery is overdue, performance becomes unlikely and may have had no impact if delivery had been made on time.

Taking into considerations all of the above, there is no scenario in which a party of a contract could successfully invoke a hardship clause, being that having a cryptocurrency as your chosen means of payment involves that you are aware or at least should be of its high volatility and potential subsequent changes in your undertaken obligation.

The use of cryptocurrency raises questions about interest charges for late payments. Article 78 of the CISG, which deals with late payment interest, is a complex solution that only offers half-measures: “If a party fails to pay the price or any sum that is in arrears, the other party is entitled to interests on it, without prejudice to any claim for damages recoverable under Article 74.” It is coming as no surprise that Article 78 poses several interpretation questions, such as when interest begins to accumulate, if the claimant may seek interest on the sum of additional damages, and if the claimant requests compound interest. In its Opinion No. 14, the CISG Advisory Council offered a detailed review of Article 78[14].

It would be obvious for the parties to determine liberally the default interest rate in the contract, in this partly unresolved issue. The contracting parties may derogate from Article 78 of the Convention and may fill in the gaps.

Tendencies in defining the rate of interest have pointed in two directions in accordance with Article 7 Paragraph 2 of the CISG on bridging internal gaps. The current rate of interest could be defined at the creditor’s place of business, or on the contrary at the debtor’s place of business or associated with the actual currency of the claim or the reference rate of the actual currency of the claim. In the silence of the CISG, the arbitral tribunals have considerable room for maneuvering to decide on the law applicable regarding the interest rate in case of late payment; that means that in the absence of such agreement of the parties, the arbitral tribunal shall apply the law which it considers to be the most appropriate.

In the case of cryptocurrencies, since they are not official currencies, there is no official base rate in the case of cryptocurrencies neither at the place of business of the creditor, nor at the place of delivery, nor any other place. Parties may decide on the base rate according to the principle of freedom of contract. In lack of decision of the penalties, the forum to decide in the case may take into account the base rate of other currencies, such as Euro or USD; however, this is, for the moment a rather artificial solution with its own problems.


It seems cryptocurrencies are on their way to becoming widely accepted. Although there could be some improvements and hiccups along the way, cryptocurrency and blockchain technologies are expected to gain prominence. It’s a high-risk investing vehicle that’s gaining traction around the world.

It’s impossible to predict whether cryptocurrencies would outperform conventional properties, but Bitcoin and other cryptocurrencies are unquestionably here to stay.

The current trends are changing the way we view money. If a couple of decades ago investing in gold and keeping money under the mattress was the way to go in order to ensure the safety of your belongings, that changed with the apparition of bank deposits and online transactions. At the time being, it is customary to use a credit card or even your phone to complete transactions, so, understandably, the idea of money as a tangible good is fading away. From this to the full implementation of cryptocurrencies, there is only one step.

Taking into consideration the ascendent trend, there is a real necessity for governments to start regulating ‘the new form of money’ in order to be in pace with society and to avoid dangerous behaviors, as well as to ensure the protection of their citizens. The perception right now is that states are afraid of the unknown that cryptocurrencies bring with them. It is enough just to see the responses to the announcement of Facebook’s stablecoin, Libra[15]. It is not desirable to ban them, as China and India are doing right now, but there is a need to set some rules in place.

In conclusion, it is not only a question of if cryptocurrencies will make their way into international sales contracts but when, so the questions that still need answering have to be addressed and certain mechanisms need to be put in place promptly.

There is no doubt that cryptocurrencies can be used as the chosen payment method in the international sales of goods contract but having clear resolutions and legislation will help guarantee not only the legality of said contracts but also the full protection of the parties, that being the desiderate of any law.

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[2] Available here (Accessed: 4 May 2021).
[3] Coinbase. “Cryptocurrency Prices, Charts, Daily Trends, Market Cap and Highlights, available here, Accessed May 4, 2021.
[4] What Are the Most Traded Cryptocurrencies? | Plus500 (2021). Available here (Accessed: 4 May 2021).
[5] Best Stablecoins • Types of Stablecoins • Benzinga (2021). Available here (Accessed: 4 May 2021).
[6] L_2018156EN.01004301.xml (2021). Available here (Accessed: 11 May 2021).
[7] Publications, P., Releases, P. and Cryptocurrency, O. (2021) One-Third of Small Businesses Accept Cryptocurrency | HSB, Available here (Accessed: 11 May 2021).
[8] Who Accepts Bitcoins in 2021? List of 20+ Major Companies (2021). Available here (Accessed: 11 May 2021).
[9] Young, J. (2018, January 29). South Korea’s Largest ECommerce Platform Is Integrating Bitcoin. Retrieved May 8, 2021, from here
[10] Bajpai, P. (2019, May 9). Countries Where Bitcoin Is Legal & Illegal (DISH, OTSK). Retrieved May 9, 2021, from here
[11] Jayaraj, D. (2020, April 14). Can We Accept Bitcoins as a Payment Method in India? What Is the Legality
Involved in It? Retrieved September 4, 2020, from here
[12] Butler, P. (2016) Article 1 CISG – The Gateway to the CISG, Available here (Accessed: 10 May 2021).
[13] Why are cryptocurrencies so volatile? | Smart Insights (2019). Available here. (Accessed: 11 May 2021).
[14] CISG-AC Opinion No. 14, Interest under Article78 CISG, Rapporteur: Professor Doctor Yeşim M. Atamer, Istanbul Bilgi University, Turkey. Adopted unanimously by the CISG Advisory Council following its 18th meeting, in Beijing, China on 21 and 22 October 2013
[15] Available here

Andreea Bărnuț

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