Thursday was a very historic day for bitcoin, as the dominant cryptocurrency made its first appearance in a US Supreme Court opinion.
The case, Wisconsin Central Ltd. V. United States, was not part of bitcoin’s regulatory or legal status. Instead, it evaluated whether employee stock options represent taxable compensation under the Railroad Retirement Tax Act of 1937.
That may turn as an unusual place for a discussion of bitcoin to come up, yet, as justices stated in both the majority and dissenting opinions, the case drove them to deliberate a fundamental question that has also taken on an improved importance in the ten years after the publication of the Bitcoin whitepaper. “What is money?”
Eventually, the 5-4 majority decided that employees should not be taxed for conducting stock options given that the action does not constitute “money remuneration.”
But, writing in a dissenting opinion, Justice Stephen Breyer contended for a “broader understanding of money” and noted that stock options should be termed as taxable compensation.
Breyer’s view which included a citation to Money: The Unauthorized Biography- From Coinage to Cryptocurrencies, used bitcoin as an example of the changing nature of money and theorized that “perhaps one day employees will be paid in Bitcoin for some other cryptocurrency.”
He stated (citations misplaced):
“Moreover, what we view as money has changed over time. Cowrie shells once were such a medium but no longer are; our currency originally included gold coins and bullion, but, after 1934, gold could not be used as a medium of exchange; perhaps one day employees will be paid in Bitcoin or some other type of cryptocurrency. Nothing in the statute suggests the meaning of this provision should be trapped in a monetary time warp, forever limited to those forms of money commonly used in the 1930’s.“