THE CISG AND LIBRA: A MONETARY

REVOLUTION FOR INTERNATIONAL COMMERCIAL

TRANSACTIONS?

Sebastian Omlor*

I. AN INTRODUCTION TO THE ―INTERNET OF MONEY‖

Not only a new star, but a complete zodiac sign is born in the sky of
money. This, at least, is the belief of the people behind Libra, as the former
―FacebookCoin‖ is now officially called. In June 2019, Facebook and its
allies, joined in the so-called Libra Association, published what has become
their blueprint—critics might say the creed—for everything related to
blockchain, tokens, and cryptocurrencies. Their whitepaper is available at
libra.org (not libra.com or even facebook.com). It has been translated into
several languages besides English, i.e. Japanese, Chinese, German and
French. The key message of the whitepaper is Libra’s mission: creating ―a
simple global currency and financial infrastructure that empowers billions of
people.‖1 It also states: ―We believe that people have an inherent right to
control the fruit of their legal labor.‖2 The whitepaper’s initial virtual pages
are characterized by the goal of giving almost two billion people access to
modern financial services.
In M-Pesa, a mobile phone-based payment and financing system in
countries like Kenya, South Africa, and India, a partly comparable model
already exists. M-Pesa is owned by Vodafone, which is also a member of
the Libra Association. But M-Pesa uses traditional currencies like the US
dollar or the Euro. In the same context, Libra sounds like a development aid
project, which intends to make the world a better place—with the little catch
that the Association’s members are predominantly private companies, whose

* Dr. iur., LL.M. (University of Saarland), LL.M. (NYU). Professor of Law, Director of the
Institute for Law and Regulation of Digitalisation (www.irdi.institute), University of
Marburg, Germany.
1
Libra Association Members, An Introduction to Libra, LIBRA 8 (June 2019),
https://libra.org/en-US/wp-content/uploads/sites/23/2019/06/LibraWhitePaper_en_US.pdf.
2
Id. at 2.

83
84 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

legitimate goal is making money: Spotify, Uber, Lyft, Vodafone, and of

course, Facebook.

1. Business Case

Nevertheless, whether or not the Libra Association is correct to expect

a promising business case is not a legal question. Financial gains might
result, inter alia, directly from the collected data, the maintenance of the so-
called Libra Reserve and the issuance of Libra, or indirectly, from the
strengthening of the market position of—what I call—the primary product.
The primary product is what the Libra Association’s members sold before
founding Libra. For example, Facebook’s product portfolio includes two
instant messaging services: Facebook Messenger and WhatsApp. Without
technical difficulties, both could be complemented by a payment function.
Whoever has tried using WeChat Pay or Alipay in China and has seen their
incredible market penetration might have an idea of how Facebook could
leverage its 2.7 billion messaging service users. Competitors would face a
higher entry threshold because customers would expect every messaging
service to offer a similar range of services. Moreover, economists have
calculated a significant seigniorage income for the members of the Libra
Association. Assuming a network of one billion users with an average
balance of 1,000 USD in Libra, the seigniorage income is expected to reach
7.5 billion USD per year.3

2. Technological Background

Aside from the outlined commercial background and corresponding

market power, Libra is supposed to have a technical DNA which is
markedly different from that of popular cryptocurrencies like Bitcoin or
Ether. The common link between them is that these cryptocurrencies run on
blockchains, a major application of distributed ledger technology. But the
Libra blockchain is designed to be more efficient, more effective and more
flexible than, for example, the Bitcoin blockchain. For these reasons, the
Libra blockchain uses a new programming language called ―Move‖ and a
Byzantine Fault Tolerant (―BFT‖) consensus approach. The BFT consensus
promises significant advantages compared to the Proof-of-Work concept
used on the Bitcoin and Ethereum blockchains. It is supposed to be reliable
even if up to one-third of the validator nodes fail. Moreover, a greater

3
Thomas Mayer, A digital Euro to compete with Libra 4 (Flossbach von Storch Research
Institute Study, July 2, 2019), https://www.flossbachvonstorch-
researchinstitute.com/fileadmin/user_upload/RI/Studien/files/study-190702-a-digital-euro-to-
compete-with-libra.pdf.
2020] CISG AND LIBRA 85

number of transactions can be processed at the same time, and it is intended

to be much more energy-efficient.

3. Libra Ecosystem

Beyond the aforementioned technical distinctions, there is another

structural difference between the Libra and Bitcoin networks. Libra is
designed to function as a stable coin. While Bitcoin increasingly has become
an object of speculation instead of a pure means of payment, Libra—per its
whitepaper—―brings together the attributes of the world’s best currencies:
stability, low inflation, wide global acceptance, and fungibility.‖4 The key to
achieving these goals lies in the so-called Libra Reserve. The whitepaper
expressly refers to the former gold standard, through which paper money
was directly linked to a certain quantity of gold.
This system was based on the Gold Standard Act of 1900 in the US and
met its demise in 1971 in the wake of a famous speech by President Richard
Nixon, a historical milestone that later would become known as the ―Nixon
shock.‖ Libra as designed would not be backed with gold, but instead with a
reserve of real assets consisting of bank deposits and short-term government
securities. The value of each Libra coin depends directly on the value of the
Libra Reserve. The size of the Libra Reserve is to be synchronized with the
circulating volume of Libra. But in clear contrast to the historic gold
standard, the owner of a unit of Libra apparently has no legally enforceable
right to convert Libra into fiat money. The whitepaper is vague, even
nebulous in this regard.
A potential obligor of such a conversion right could be the Libra
Association. It is the governing entity of the Libra ecosystem including the
Libra Blockchain and the Libra Reserve. The Libra Association is supposed
to be independent of individual stakeholders like Facebook. Legally, the
Libra Association is a not-for-profit membership organization, which has its
seat and headquarters in Geneva, Switzerland. According to the Libra
whitepaper, the decision in favor of Switzerland was made due to its
―history of global neutrality and openness to blockchain technology.‖ 5
Decisions of the Association are made by its council, in which all members
have one vote. Major decisions require a two-thirds supermajority of the
votes. Both the creation of new Libra coins, called ―minting‖—and the
destruction, called ―burning‖—are the exclusive competence of the Libra
Association. But neither the minting nor the burning is processed by the
Libra Association itself. Instead, the Association makes use of authorized
resellers, which buy Libra coins from the Libra Association or sell them

4
Libra Association Members, supra note 1, at 7.
5
Id. at 8.
86 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

back to the Libra Association. The purchase of Libra coins by these resellers
leads to the minting of the corresponding coins by the Libra Association,
while the purchase price is added to the Libra Reserve. On the other hand,
money is taken from the Libra Reserve in case of a sale from the resellers to
the Libra Association. For these reasons, the Libra Association intends to act
as a ―buyer of last resort.‖6

4. Use Cases

Keeping the development aid approach and potential distribution via

messenger apps in mind, one might doubt the usability of Libra for
international business transactions under the legal regime of the United
Nations Convention on Contracts for the International Sale of Goods
(―CISG‖). The Convention does not include most consumer transactions, as
―goods bought for personal, family or household use‖ do not fall within the
scope ratione materiae by virtue of Art. 2(a) CISG. Nevertheless, high-
volume transactions also can be processed via the Libra platform. The Libra
transaction network theoretically is able to process up to 1000 transactions
per second.7 In addition, machine-to-machine payments and smart contracts
can be embedded in the Libra blockchain. Libra as a transnational
transaction currency could reduce the transaction cost resulting from
necessary currency exchanges when the parties are located in different
currency areas. Moreover, blockchain technology has the potential to render
intermediaries such as banks and payment service providers unnecessary—
as Bill Gates once said: ―Banking is necessary, banks are not.‖ In light of
the Libra Association’s members, one might doubt such a development in
the case of Libra.

II. LIBRA TRANSACTIONS UNDER THE CISG’S REGIME

Libra is potentially relevant for the CISG under two scenarios: first, the
sale of Libra coins with payment in fiat money, and second, the sale of any
goods with payment in Libra coins.

1. Sale of Libra

a) Definition of ―Sale―

6
Id.
7
Zachary Arnsden et al., The Libra Blockchain, LIBRA 22,
https://developers.libra.org/docs/assets/papers/the-libra-blockchain.pdf (last updated Sept. 25,
2019).
2020] CISG AND LIBRA 87

With regard to the first scenario, one has to clarify whether a sale of
goods occurs and opens the CISG’s scope of application. The CISG lacks a
precise definition of a sales contract.8 Nevertheless, the Convention itself
provides for an autonomous concept which is derivable especially from Art.
30 and 53 CISG.9 According to these provisions, a sales contract obliges the
seller to deliver goods, to hand over the necessary documents and to transfer
property of the goods; the buyer’s obligation consists of the payment of the
price and taking delivery of the goods.10 The follow-up question is whether
Libra coins constitute ―goods‖ within the meaning of Art. 1, 30, 53 CISG.

aa) Libra Coins as ―Goods‖?

The Convention does not define ―goods.‖ Taking Art. 7 CISG into
account, the definition of ―goods‖ must not be derived from domestic law,
but is subject to an autonomous interpretation of the CISG in its
international character.11 Among scholars12 and courts,13 it is generally
accepted that goods are at least moveable and tangible items; the time of
delivery is decisive.14 Whether the definition goes beyond this narrow
concept is subject to controversy. Some courts have excluded an interest in a

8
Trib., 16 febbraio 2009, Foro. It. V Forli (It.),
http://cisgw3.law.pace.edu/cases/090216i3.html.
9
Trib., 16 febbraio 2009, Foro. It. V Forli (It.),
http://cisgw3.law.pace.edu/cases/090216i3.html.
10
Kantongericht Schaffhausen [KG] [District Court] Feb. 25, 2002 (Switz.),
http://cisgw3.law.pace.edu/cases/020225s1.html.
11
Ingeborg Schwenzer & Pascal Hachem, in COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS (CISG) Art. 1 para. 16 (Ingeborg Schwenzer & Peter
Schlechtriem eds., 4th ed. 2016); FRANCO FERRARI & MARCO TORSELLO, INTERNATIONAL
SALES LAW – CISG – IN A NUTSHELL 95 (2014).
12
Ingeborg Schwenzer & Pascal Hachem, in COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS (CISG) Art. 1 para. 16 (Ingeborg Schwenzer & Peter
Schlechtriem eds., 4th ed. 2016); FRANCO FERRARI & MARCO TORSELLO, INTERNATIONAL
SALES LAW – CISG – IN A NUTSHELL 96 (2014); CLAYTON GILLETTE & STEVEN WALT, THE
UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALES OF GOODS – THEORY AND
PRACTICE 51 (2nd ed. 2016); Pilar Perales Viscasilas, in UN CONVENTION ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS Art. 1 para. 37 (Stefan Kröll et al. eds., 2nd ed. 2018).
13
Oberster Gerichtshof [OGH] [Supreme Court] Nov. 10, 1994, docket No. 2 Ob 547/93, 67
ENTSCHEIDUNGEN DES ÖSTERREICHISCHEN OBERSTEN GERICHTSHOFES IN ZIVILSACHEN [SZ]
No. 198 (Austria.), http://cisgw3.law.pace.edu/cases/941110a3.html; Oberlandesgericht Köln
[OLG] [Higher Regional Court] Aug. 26, 1994, NEUE JURISTISCHE WOCHENSCHRIFT –
RECHTSPRECHUNGS-REPORT [NJW-RR] 245, 1995 (Ger.),
http://cisgw3.law.pace.edu/cases/940826g1.html; Oberlandesgericht Köln, [OLG] [Higher
Regional Court] May 21, 1996, docket No. 22 U 4/96, CISG-online 254 (Ger.),
http://cisgw3.law.pace.edu/cases/960521g1.html.
14
Trib., 16 febbraio 2009, Foro. It. V Forli (It.),
http://cisgw3.law.pace.edu/cases/090216i3.html; Trib., 25 febbraio 2004, Foro It. V Padova
(It.), http://cisgw3.law.pace.edu/cases/040225i3.html.
88 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

limited liability company15 or an assigned debt,16 while others17 expressed

some openness to including intangible goods. Standard software is supposed
to fall into the CISG’s sphere of application,18 but tailor-made software is
subject to controversy.19 Moreover, there are scholars who argue in favor of
also applying the CISG to digital goods.20 But the concept of what
constitutes a ―digital good‖ is broadly unclear and vague.
Technically, a Libra coin—like Bitcoin or Ether—represents a token on
a blockchain. In legal terms, the owner’s power to dispose over the token
might be the object of a sales contract. Neither this legal and factual power
nor the token itself is tangible. On the flipside, Libra coins are characterized
by a high level of standardization. They lack legally relevant
individualization. Like standard software, Libra coins might be classified as
mass products, which are not tailor-made. One might argue in parallel to
standard software that the form of storage—on a tangible device or online in
a digital cloud—should not lead to a different legal outcome.

bb) Exception for Money (Art. 2(d) CISG)

The decision on the classification of Libra coins as goods under the

CISG’s regime can be left open if the sale of Libra coins is, irrespective of
the definition of goods, not covered by the CISG’s scope of application. By
virtue of Art. 2(d) CISG, ―sales of stocks, shares, investment securities,
negotiable instruments or money‖ do not fall within the Convention’s scope
of application. The provision’s rationale refers to often mandatory rules of

15
Shares of Stock (Hung. v. Ger.), Case No. Vb 92205 (Arbitration Court of the Chamber of
Commerce and Industry of Budapest, 1993),
http://cisgw3.law.pace.edu/cases/931220h1.html.
16
Trib., 12 luglio 2000, Foro. It. V Vigevano (It.),
https://www.uncitral.org/clout/clout/data/ita/clout_case_378_leg-1602.html.
17
Oberlandesgericht Koblenz, [OLG] [Higher Regional Court], Sept. 17, 1993, docket No. 2
U 1230/91 (Ger.), http://cisgw3.law.pace.edu/cases/930917g1.html.
18
Spiros Bazinas, Uniformity in the Interpretation and Application of the CISG: The Role of
Clout and the Digest, in CELEBRATING SUCCESS: 25 YEARS UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 18, 25 (Singapore International
Arbitration Centre ed., 2006); FRANCO FERRARI & MARCO TORSELLO, INTERNATIONAL SALES
LAW – CISG – IN A NUTSHELL 96 (2014); CLAYTON GILLETTE & STEVEN WALT, THE UN
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALES OF GOODS – THEORY AND
PRACTICE 50 (2nd ed. 2016).
19
In the affirmative Oberlandesgericht Koblenz, [OLG] [Higher Regional Court], Sept. 17,
1993, docket No. 2 U 1230/91 (Ger.), http://cisgw3.law.pace.edu/cases/930917g1.html.; in
the negative Fabian Meier & Marco Stacher, in UN-KAUFRECHT – CISG, KOMMENTAR ZUM
ÜBEREINKOMMEN DER VEREINTEN NATIONEN ÜBER VERTRÄGE ÜBER DEN INTERNATIONALEN
WARENKAUF VON 1980 Art. 2 para. 4 (Christoph Brunner ed., 2nd ed. 2014); Pilar Perales
Viscasilas, in UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Art.
1 Rn. 40 (Stefan Kröll et al. eds., 2nd ed. 2018).
20
Mirjam Eggen, Eine Rundschau über Herausforderungen und mögliche Lösungen, 2017
IHR 229, 231.
2020] CISG AND LIBRA 89

domestic law governing these objects.21 A conflict between the CISG’s legal
regime and these rules should be avoided. Currently, most jurisdictions lack
specific rules on cryptocurrencies (e.g., Libra coins or Bitcoin) within the
traditional concept of currency, and legal tender is restricted to fiat money
issued by a sovereign or state. There is, consequently, no actual conflict
between domestic and transnational rules. This absence of conflicting rules
might be used to argue that cryptocurrencies cannot fall under the exclusion
for money in Art. 2(d) CISG. But such an interpretation of Art. 2(d) CISG is
too narrow. The Convention simply assumes the existence of mandatory
domestic law with respect to money. It does not require an actual conflict; a
mere theoretical conflict is sufficient for the application of Art. 2(d) CISG.
Otherwise, the application of Art. 2(d) CISG would have to distinguish
between cases in which mandatory law exists and those in which such
provisions do not exist. The extent to which money is regulated diverges
from state to state. In sum, for the purpose of Art. 2(d) CISG, the potential
existence of mandatory domestic rules is sufficient.
Regardless of this abstract concept, it is a different question whether
cryptocurrencies such as Libra’s would fall under the term ―money‖ set out
in Art. 2(d) CISG. The CISG does not define ―money.‖ In light of Art. 7
CISG, the definition must be an autonomous one, which should not be
interpreted with reference to domestic ideas. In general, money is a dazzling
phenomenon, which has strong ties to the fields of legal history, psychology,
sociology, politics, economics, and of course, law. Independent of Art. 2(d)
CISG, most would probably agree that fiat currencies such as the US dollar,
the Euro, the Japanese yen, the Swiss franc or the Chinese renminbi
constitute money. But the legal concept of money is often unclear and lacks
a precise definition. Both case law and scholarly work dealing with Art. 2(d)
CISG mainly refrain from drawing up a definition of money. Some scholars
limit money to ―all lawful coins and paper money,‖22 which excludes
dematerialized means of payment such as book money from Art. 2(d) CISG.
It seems to be widely accepted that commemorative or collector coins do not
meet the term’s requirements.23 The issuance by private institutions without
the involvement of a sovereign is, according to some scholars,24 no obstacle

21
Franco Ferrari, What Sources of Law for Contracts for the International Sale of Goods?
Why One has to Look Beyond the CISG, 25 INT’L REV. L. & ECON. 314, 322-323 (2005).
22
Frank Spohnheimer, in UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS Art. 2 para. 40 (Stefan Kröll et al. eds., 2nd ed. 2018).
23
Franco Ferrari, in KOMMENTAR ZUM EINHEITLICHEN UN-KAUFRECHT Art. 2 para. 37 (Peter
Schlechtriem & Ingeborg Schwenzer eds., 6th ed. 2013); Manuel Lorenz, in INTERNATIONAL
EINHEITLICHES KAUFRECHT Art. 2 para. 8 (Wolfgang Witz et al. eds., 2016); Frank
Spohnheimer, in UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS
Art. 2 para. 40 (Stefan Kröll et al. eds., 2nd ed. 2018).
24
Manuel Lorenz, in INTERNATIONAL EINHEITLICHES KAUFRECHT Art. 2 para. 8 (Wolfgang
Witz et al. eds., 2016).
90 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

in recognizing cryptocurrencies such as Bitcoin as money within the

meaning of Art. 2(d) CISG.
Most jurisdictions do not have a cohesive and self-contained law of
money. On this account, most jurisdictions lack a legal definition of money.
Economists tend to accept everything as money that simply fulfills the basic
functions of money: money is what money does.25 The two basic functions
of money are to be a unit of account and a universal means of exchange.26
Sometimes, the storage of value over time is added as a third function,27 but
it is ultimately an aspect of the exchange function: storing value is carried
out by two exchanges that occur separately in time. From a legal
perspective, the hurdle for money might be higher. Some jurisdictions are
more reluctant when it comes to private money such as book money 28
although money does not equal legal tender29; money is a much broader
concept open to party autonomy in many ways.

b) Interim Conclusion

Concisely, I would like to limit myself to the concept of money

contained in Art. 2(d) CISG. Here, the scope ratione materiae should be
found by a systematic interpretation in light of the other exceptions in
Art. 2(d) CISG. The provision covers several financial instruments, which
stem from a private issuer. As money is in line with these financial
instruments, there should also be no distinction between money issued by a
private or a state institution. Moreover, Libra coins might—depending on
the final concept, the distribution and market acceptance—become a
universal medium of exchange.
In conclusion, Libra coins are likely to fulfill the requirements for
being money by virtue of Art. 2(d) CISG. Therefore, a sale of Libra coins is
very likely not covered by the CISG.

2. Sale of Goods with Libra Payment

Although the purchase of Libra coins with fiat money does not
constitute a sales contract under the CISG, this interim result does not
automatically lead to the conclusion that the purchase of goods paid with

25
FRANCIS WALKER, POLITICAL ECONOMY 123 (3rd ed. 1892).
26
SEBASTIAN OMLOR, GELDPRIVATRECHT 55-56 (2014).
27
Peter Czada, in INTERNATIONALE WÄHRUNGSPROBLEME 7 (Peter Czada et al. eds.,1988);
Fritz Reichert-Facilides, Geldwertschwankungen und Privatrecht, 1969 JZ 617, 619.
28
87 BGHZ 156 (162, 163) (Ger.).
29
Helmut Siekmann, Monetary Aspects of the Euro as Single European Currency – a
German Perspective, in THE EURO AS LEGAL TENDER (Sebastian Omlor & Robert Freitag
eds., forthcoming 2020).
2020] CISG AND LIBRA 91

Libra coins in turn falls outside of the CISG’s scope of application. In

regard to this question, the focus shifts from the definition of goods and
exceptions, by virtue of Art. 2 CISG, to the obligation of the buyer under the
CISG.

a) Concept of the ―Price for the Goods‖

The Convention names the buyer’s duty to pay the purchase price, inter
alia, in Art. 53 CISG. The wording of Art. 53 CISG is almost identical with
Art. 56 ULIS, which also includes the term ―pay the price for the goods.‖
Older scholarly works30 tend to view only cash and cheques as conforming
funds. In more recent literature, some scholars give priority to party
autonomy and the contractual agreement of the parties.31 Other scholars
limit this autonomy to the quantity of the payment and require a payment of
money.32 This question must not be mistaken for the discussion on the
default currency of payment.33

aa) Wording

Taking the provision’s wording as a starting point for its interpretation,

the use of the verb ―to pay‖ could be seen as a mandatory connection with
the object ―money‖; only money could be paid. But the Convention
expressively speaks of the payment of a ―price,‖ not of money. Moreover,
Art. 53 CISG adds: ―as required by the contract.‖ This amendment makes
clear that the Convention acknowledges at least some discretion of the
contracting parties with respect to the determination of the price. The
provision does not show any tendency to restrict this party autonomy to the
quantity of the payment.

bb) Context and Ratio Legis

30
Dietrich Maskow, in COMMENTARY ON THE INTERNATIONAL SALES LAW: THE 1980 VIENNA
SALES CONVENTION 394 (Cesare Bianca & Michael Bonell eds., 1987).
31
Petra Butler & Arjun Harindranath, in UN CONVENTION ON CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS Art. 53 para. 6 (Stefan Kröll et al. eds., 2nd ed. 2018).
32
Christiana Fountoulakis, in BECK-ONLINE.GROSSKOMMENTAR, CISG Art. 53 para. 7
(Wolfgang Ball ed., 2019).
33
Cf. Oberlandesgericht Koblenz, [OLG] [Higher Regional Court], Sept. 17, 1993, docket
No. 2 U 1230/91 (Ger.), http://cisgw3.law.pace.edu/cases/930917g1.html; Kammergericht
Berlin [KG] [Upper Court], Jan. 24, 1994, docket No. 2 U 7418/92 (Ger.),
http://cisgw3.law.pace.edu/cases/940124g1.html; Petra Butler & Arjun Harindranath, in UN
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Art. 53 para. 10
(Stefan Kröll et al. eds., 2nd ed. 2018).
92 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

Nevertheless, the autonomy granted to the parties contains two

significant restrictions. First, the discretion of the parties ends where a sale
becomes a barter contract. The exchange of goods is not covered by the
CISG.34 Consequently, the price must not be composed of the delivery of
goods. Second, the subject of the duty to pay the price must, like money,
function as a unit of account and as a neutral medium of exchange. This
requirement also follows from the delimitation to ―goods.‖ But mainly, this
functional approach arises out of a systematic interpretation of Art. 53
CISG.
Art. 56 CISG gives rise to the possibility of calculating the price in
direct correlation to the weight of the goods. The provision consequently
requires the price to be divisible in any desired way. Moreover, Art. 44 and
50 CISG allow the buyer to reduce the price proportionally, or more
precisely: ―in the same proportion as the value that the goods actually
delivered had at the time of the delivery bears to the value that conforming
goods would have had at that time.‖ If the price were not divisible
arbitrarily, a proportional reduction would not be possible. Money always
meets this requirement due to its function as unit of account. But
cryptocurrencies like Bitcoin and most likely also Libra coins fulfill this
function, as well.
As a neutral medium of exchange, the price is negatively characterized
as a non-good. In a positive way, the payment of the price should enable the
seller to acquire other goods of arbitrary quality and quantity on the market.
This requires universal recognition as a medium of exchange. In general,
such universal recognition can be geographically restricted, e.g., to the state
in which the seller is located. Depending on the specifics of the transaction,
the area of recognition can vary. Cryptocurrencies like Bitcoin today in
general lack such a universal recognition even if a purely virtual monetary
area were sufficient. However, the Libra project due to Facebook’s
involvement alone could hold immense market power to the extent that
universal recognition could emerge (e.g., directly from the customer base of
Facebook’s messaging services).
In sum, Libra coins would—based on the June 2019 whitepaper—meet
the requirements to constitute a price for a CISG sale contract.

3. Requirement of a Contractual Agreement

Traditionally, the content of the payer’s duty to pay a given price is

determined by two factors: the relevant currency and the number of its units.
As the term ―currency‖ might be limited to monetary units and systems

34
Christiana Fountoulakis, in BECK-ONLINE.GROSSKOMMENTAR, CISG Art. 53 para. 7.1
(Wolfgang Ball ed., 2019).
2020] CISG AND LIBRA 93

governed by a sovereign,35 cryptocurrencies issued by private entities, like

Libra coins, or lacking any central entity at all, like Bitcoin, might not fit
into this equation. Nevertheless, the criteria used to determine the currency
of payment should also be applied to cryptocurrencies, private forms of
money and commodity money.
Primarily, the currency of payment results from the contractual
agreement of the parties. Only in the event of such an agreement has not
been concluded and the currency is not contractually stipulated, the
Convention refers alternatively to usages pursuant to Art. 9 CISG. Lacking a
sufficient usage, this gap in the CISG must be filled via reference to general
principles by virtue of Art. 7(2) CISG. In light of Art. 57(1)(a) CISG, the
local currency at the seller’s place of business is therefore decisive.36 Under
the existing currency regimes, such a local currency can only be a state
currency. Private cryptocurrencies are not tied to a geographical territory, in
which their use and acceptance are either legally promoted or at least
factually dominant. Libra sees itself as a protagonist in the ―Internet of
Money,‖ which forgoes a geographical and analogue link. In general, only if
a sovereign were to create its own cryptocurrency would the necessary
geographical reference exist. As a consequence, the purchase price can only
be due in Libra or other private cryptocurrencies if the parties have agreed
precisely on this means of payment. An application of Art. 57(1)(a) CISG
has to be ruled out.

4. Replacement of the Currency

In general, the CISG does not provide for the buyer’s right to fulfill its
payment obligation in a currency different from the currency contractually
agreed on.37 Provisions in domestic law that allow the buyer to discharge its
debt not only in the contractual currency, but alternatively in the currency of
the place of payment—as they exist, e.g., in the German Civil Code—are
therefore not applicable.38 Nevertheless, the buyer can have a right to
unilaterally modify the stipulated currency in exceptional circumstances.

35
SEBASTIAN OMLOR, J. VON STAUDINGERS KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH
MIT EINFÜHRUNGSGESETZ UND NEBENGESETZEN, BUCH 2, RECHT DER SCHULDVERHÄLTNISSE,
§§ 244-248; PRKG (GELDRECHT) Vorbem zu §§ 244-248 para. A193 (2016).
36
Oberlandesgericht Koblenz, [OLG] [Higher Regional Court], Sept. 17, 1993, docket No. 2
U 1230/91 (Ger.), http://cisgw3.law.pace.edu/cases/930917g1.html; Kammergericht Berlin
[KG] [Upper Court], Jan. 24, 1994, docket No. 2 U 7418/92 (Ger.),
http://cisgw3.law.pace.edu/cases/940124g1.html.
37
Oberster Gerichtshof [OGH] [Supreme Court], Oct. 22, 2001, 74 ENTSCHEIDUNGEN DES
ÖSTERREICHISCHEN OBERSTEN GERICHTSHOFES IN ZIVILSACHEN [SZ] No. 177 (Austria),
http://cisgw3.law.pace.edu/cases/011022a4.html.
38
Undecided in Oberlandesgericht Koblenz, [OLG] [Higher Regional Court], Sept. 17, 1993,
docket No. 2 U 1230/91 (Ger.), http://cisgw3.law.pace.edu/cases/930917g1.html.
94 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 3.1

The Convention itself establishes a unilateral right for the adjustment of the
sale contract. This right is based on the parties’ commitment to good faith
by virtue of Art. 7(1) CISG.39 Additionally, the modification of the contract
in case of a substantial change of external circumstances constitutes an
international trade usage pursuant to Art. 9(2) CISG. It is true that soft laws
such as the Unidroit Principles of International Commercial Contracts
(―Unidroit Principles 2016‖), the Principles of European Contract Law
(―PECL‖) and the Draft Common Frame of Reference (―DCFR‖) lack
binding legal force. However, they can function as ―persuasive authorities‖40
and thus influence trade usages. A unilateral right of contract modification
due to a substantial change of external circumstances is recognized by
Art. 6.2.3(4b) Unidroit Principles 2016, Art. 6:111(3b) PECL, and Art. III –
1:110(2a) DCFR.
In sum, the Convention contains a buyer’s right to unilaterally modify
the payment currency in exceptional circumstances by virtue of Art. 7(1)
and Art. 9(2) CISG. Such a substantial change of external circumstances
might, for example, result from capital controls or similar measures of
foreign trade and currency legislation that could not have been reasonably
foreseen at the time of the conclusion of the contract. With respect to Libra
coins, if the buyer has the obligation to pay in Libra at the seller’s place of
business in Country A, which after the conclusion of the contract bans
Libra, the buyer could unilaterally change the currency to the local currency.
The Convention does not force any party to carry out illegal acts.

III. CONCLUSION

To conclude, the CISG shows an openness to further developments and

the evolution of money and currency. A transnational notion connects the

39
OLG Brandenburg, [OLG] [Higher Regional Court], Nov. 18, 2008, 2009
INTERNATIONALES HANDELSRECHT [IHR] 105, 114 (Ger.),
http://cisgw3.law.pace.edu/cases/081118g1.html; Alejandro Garro, Exemption of Liability for
Damages Under Article 79 of the CISG, CISG-AC Opinion No. 7 Comment 40 (Oct. 12,
2007); Ingo Saenger, in INTERNATIONALES VERTRAGSRECHT Art. 4 CISG para. 18 (Franco
Ferrari et al. eds., 3rd ed. 2018); Harm Peter Westermann, in MÜNCHENER KOMMENTAR ZUM
BÜRGERLICHEN GESETZBUCH Art. 7 CISG para. 13 (Franz-Jürgen Säcker et al., 8th ed. 2019);
Ulrich Magnus, in J. VON STAUDINGERS KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH MIT
EINFÜHRUNGSGESETZ UND NEBENGESETZEN, BUCH 2, RECHT DER SCHULDVERHÄLTNISSE,
WIENER UN-KAUFRECHT (CISG) Art. 79 para. 24 (Michael Martinek ed., 2012); similar
Hilaturas Miel, S. L. v. Republic of Iraq, 573 F.Supp.2d 781 (2008); Sebastian Omlor,
Inflationsbewältigung im UN-Kaufrecht, 2013 JZ 967, 973; in the negative: Ingeborg
Schwenzer, Force majeure and hardship in international sales contracts, 39 VUWRL 709,
724-725 (2008); Ingeborg Schwenzer, Die clausula und das CISG, in TRADITION MIT
WEITSICHT: FESTSCHRIFT FÜR EUGEN BUCHER ZUM 80. GEBURTSTAG 723, 738-741 (Wolfgang
Wiegand et al. eds., 2009).
40
Franco Ferrari, in KOMMENTAR ZUM UN-KAUFRECHT (CISG) Art. 7 para. 63 (Peter
Schlechtriem et al. eds., 7th ed. 2019).
2020] CISG AND LIBRA 95

Convention and global cryptocurrencies. Nevertheless, the CISG is not

limited to projects such as Libra, but would also recognize similar concepts
run by central banks or other private institutions. The future of Libra is still
written in the stars, as leading central banks and politicians including those
in the current US administration have spoken disapprovingly of it. Even if
the Libra project fails, the technological concept must be considered
separately with respect to a viable monetary revolution in international
commercial transactions deploying blockchain technology, smart contracts,
and machine-to-machine payments.