24 February 2024
France, a progressive nation that sees itself as the head of the European Nations (EN), has a prominent place among the globe's contemporary international locations. As with other countries, France has devised a strategy to advance blockchain technology and Cryptocurrencies.
France was not alone in seeing Cryptocurrency into the perspective of monetary criminality. The only time any French official mentioned Bitcoin was in Tracfin's 2011 annual report, which is published annually and entrusted with combating financial crime, monetary smuggling, as well as terrorist funding. Meanwhile, other agencies started looking at Cryptocurrencies during the Cryptocurrency boom in December and November of 2013. A brief study on "the hazards associated with the growth of virtual currencies" was released by the French Central Bank. In January 2014, the French banking and insurance regulatory body, the Prudential Supervision and Resolution Authority (ACPR), issued a statement mandating the licensing of businesses that accept legal cash on behalf of customers in connection with the acquisition or sale of Cryptos. The AMF released a white paper in October 2017 to initiate discourse on initial coin offerings.
Government’s Attitude Towards Cryptocurrency
France has a constructive stance toward Cryptos and has enacted certain required laws on them. France's financial markets are inspected by the Authority des Marches Financiers (AMF), the French Prudential Supervision and Resolution Authority (ACPR), and the Agence Nationale de la Securite des Systemes information (ANSSI). Blockchain technology, which has inspired a number of ambitious French ventures, are shaping the coin's destiny. As an illustration, consider Tezo, a blockchain platform supported by a virtual coin called tez (sometimes spelled tezzie). French military officials said they were verifying legal costs that used the Tezos network. Minister Bruno Le Maire of France has declared the country's unwavering support for the Cryptocurrency and blockchain industries.
On April 28, 2022, European policymakers debated another rule, but not as exhaustively as the MiCA law. The TFR Directive is now an international regulation that addresses the problem of laundering money via wire transfers. This regulation was first issued in 2015, but in March 2022, MEPs recommended updating it to include the bitcoin industry. When the updated version of the directive is approved, it would make it possible to track all bitcoin trades done by governed businesses. Since then, there have been no further versions released.
Regulations on Cryptocurrencies
In accordance with the EU 5AMLD, the AMF has issued new regulations for suppliers of digital asset services known as PACTE legislation. The AMF mandates that suppliers of digital asset services supply at least one of the following: Purchasing and selling digital assets for fiat money, trading one digital asset for another, managing digital asset portfolios, and advising clients on digital asset investments are all services that may be provided by a digital asset custodian.
Securities and Investment Laws
A person should be aware of the following two main Securities and Investment Laws:
1. Security Tokenization and Issuance
Ordinance No. 2016-520, passed on April 28, 2016, introduced blockchain for the first time into French legislation by establishing a specific regulatory environment that governs the use of crowd-lending websites to fund small and medium-sized enterprises. Promissory notes or minibons may be issued using a crowd-lending platform as per the Ordinance. Minibons may be registered as well as transferred in the classic fashioned method where the issuer keeps and regularly upgrades a registry of all minibons users or via a central digital recording device.
2. Asset Managers and Investment Funds
Optional fund managers have already been establishing bitcoin investment funds during the last 2 years. In November 2017, French innovative asset manager Tobam created what it called the "1st European Cryptocurrency fund," the Tobam Bitcoin Fund. Therefore, the AMF did not approve Tobam's fund since Cryptocurrencies did not fall under any of the asset management regulations. Professional specialized investment funds (FPSs) may now buy assets recorded in a distributed digital recording device i.e., a blockchain, such as Cryptocurrency, according to the PACTE Act. Private equity firms may put up to 20% of their capital in digital assets according to the PACTE Act. Due to the nature of FPSs and FPCIs as alternative investment funds, only a licensed asset manager is permitted to act as manager; nonetheless, both types of funds are needed to designate a depositary which is notably in charge of the custody of the assets owned by the fund. It is still necessary for licensed Cryptocurrency asset managers to locate depositaries that are prepared to accept Cryptos' custody.
When a network operator promotes the purchase or sale of virtual currencies for fiat money in addition to offering a custodial service, then they must register with AMF. When applying for AMF membership, network operators must demonstrate the number of things.
- An example of a cybersecurity scheme that highlights potential preventative measures and a strategy for the next two years in the company.
- The provider's desired digital asset list.
- The blueprint for the company's internal auditing procedures.
- The method through which an insurance company processes a claim.
- A strategy for an information technology infrastructure.
- This scheme is intended to stop the financing of terrorism and other illegal activities.
- This place's precise coordinates
- A minimum of one upper-level manager.
Indemnity insurance or a minimum amount in reserves must be submitted by service providers together with their registration applications. Technical audits will be performed when the service provider is approved to make sure that cybersecurity is a top priority. France recently enacted a brand-new legislative framework, termed the Business Transformation and Growth legislation (PACTE law), after becoming the first country to permit the registration and transfer of Cryptocurrencies. This legislation regulates virtual currencies or Cryptocurrencies, digital asset service providers or marketplaces, and initial coin offerings (ICOs) with the goal of being at the forefront of blockchain technology.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.