One of the very first countries to deploy a crypto framework, France has taken another step to ease out crypto tradings in the country. As per France’s Finance Minister, Bruno Le Maire, all crypto-to-crypto transactions are exempted from taxation. This means that as long as locals buy or trade from any crypto to another crypto, they will be given tax exemption. The minister’s action is welcomed in the country’s crypto community but his assault on Facebook’s crypto Libra, shows no sign of slowing down.
French government clarified that only when a user convert their crypto assets into traditional fiat currency, they would be subjected to cryptocurrency gains tax. In simple words, a crypto user can easily dodge cryptocurrency gains tax by just sticking with crypto on both, buying and selling ends.
Le Maire, France minister of economy and finance, has been a crypto enthusiast for quite some time now. He explained that optimum time to tax users is when cryptocurrencies gets exchanged against fiat. In this regard, his exact words were:
We believe that the moment the gains are converted into traditional money is the right time to assess tax.
A few years ago, Le Maire was not much of a crypto and blockchain fan but later, confessed his mistake of undermining the innovative capabilities of blockchain and cryptocurrencies. Since then, he had been supporting and working to bring about suitable crypto and blockchain regulations.
Le Maire played a key role in devising France’s crypto framework. Under his leadership, the bill, Plan d’Action Pour la Croissance et la Transformation des Entreprises (PACTE) was passed. According to the bill, crypto projects were allowed to raise funds via initial coin offering (ICO). Apart from that, attaining a certificate prior to the inauguration of crypto businesses was made compulsory.
Le Maire who was very confident in his framework, invited other European Union (EU) countries to follow France’s footsteps. While speaking at Paris Blockchain Week Summit, the minister urged other EU countries to deploy a crypto regulatory framework and welcome crypto innovation. Considering French cryptocurrency and blockchain regulations as impeccable, he concluded that French crypto and blockchain regulatory model is also suitable model for other countries as well.
Although Le Maire’s policies are quite bitcoin endorsing, the minister has strictly decided to not extend his approbation for Facebook’s cryptocurrency, Libra. Le Maire, who viewed Libra as a risk to the sovereignty of governments, straightforwardly rejected the said crypto by declaring that it won’t be authorized in the European region. At OECD conference, he stated:
All these concerns around libra are serious. So I want to say this with a lot of clarity: In these conditions, we cannot authorize the development of libra on European soil
Le Maire never advocated the idea of Facebook creating a stablecoin and when the crypto project was announced, the French minister put forward several concerns regarding it. Apart from undermining the sovereignty of other national currencies, Le Maire elaborated that Libra could be used for terrorist funding and money laundering.
While Le Maire has been very outspoken on Libra’s downsides, the representative of Libra Association has taken criticism very positively. In his reply to Le Maire’s take, the head of policy and communication of Libra Association, Dante Disparte, said:
We welcome this scrutiny and have deliberately designed a long launch runway to have these conversations, educate stakeholders and incorporate their feedback in our design. The Libra Association and its members are committed to working with regulatory authorities to achieve a safe, transparent, and consumer-focused implementation of the Libra project.
Pegged to several currencies, Libra is different from the world’s largest cryptocurrency by market cap, bitcoin, in several aspects. Libra will be controlled by members of Libra association such as VISA, Uber, etc whereas bitcoin is a decentralized digital currency that can’t be controlled.
Facebook has a userbase of billions of people and Libra is expected to accelerate the process of mass crypto adoption. However, several governments aren’t welcoming the initiative brought by the social media giant due to several concerns and risks.
Despite the minister’s severe opposition, the future of Libra can’t be predicted at the moment. As he had changed his mind over bitcoin, let’s see if the think tank behind Libra can modify the project and compel Le Maire into accepting the crypto.