The blockchain legislation enacted by the French government now gives crypto businesses the right to open local bank accounts. The longstanding bone of contention between crypto startups and French banks is now removed by new legislation, passed by the French Parliament.
The French Financial authority in charge of the stock market, Autorité des marchés financiers (AMF), published a report about the changes enacted due to the blockchain law, passed by the French Parliament on 11th April 2018. The bill establishes a framework for crypto startups in the country, and also enable businesses to launch their Initial Coin Offerings (ICO). However, the law also gives regulatory powers to AMF and makes sure that all startups in the crypto space, get to open an account in local banks without any delay. The law also gives crypto traders the option to register themselves with AMF. Registered traders get to provide crypto services such as asset management, advisory, remittances, and underwriting while unregistered users cannot provide these services. The registration is optional however the AMF elaborated:
“Whether or not they choose to obtain the optional license, service providers who wish to offer digital asset custody services to third parties or to purchase/sell digital assets in exchange for legal tender are subject to mandatory registration with the AMF”.
The law also streamlined the process for businesses to raise money through Initial Coin Offerings (ICO). For an ICO they provide an option to the companies to take approval from AMF, which approves on basis of a few set parameters. Companies are required to be registered in France and adequate information about the project and the money-raising process should be shared with AMF. However, companies cannot raise funds from the general public without taking prior approval. AMF would also put checks in place for safeguarding investor’s money and prevent illegal activities. AMF’s chairman, Robert Ophèle while talking about these regulations said:
These are common sense rules. This regime will enable us to address this new issue with a proportionate framework that both protects investors and fosters innovation. We believe it will attract good projects.
Changing Outlook Towards Crypto
France in 2018, took a complete 180 degrees shift in its outlook towards crypto. The country aims to be the crypto financial center for Europe. Considering the current political and economic influence the country has in the EU, it is most likely going to achieve ambition. This is a significant shift from the countries previous position when the regulators banned 15 anonymous cryptos and were planning to ban bitcoin and Ethereum too. The French government does not want to miss out on the blockchain revolution, and they have implied this, again and again, Pierre Noizat, a French crypto Entrepreneur while talking about the government’s changing views on cryptocurrencies said:
“The French government is not hiding its ambition to make France an ICO capital, as they do not want to miss out on the blockchain revolution. They are regularly speaking with French blockchain and crypto-entrepreneurs in France to get a better grasp on the market, to understand its problems, and to regulate the market accordingly”.
The French Finance Minister Bruno Le Maire was one of the staunchest dissidents of cryptocurrencies and blockchain, in a public letter to the Argentinean Finance Minister he called cryptocurrencies a risk to the Global Economy and novice investors. However, recently the Finance Minister has been praising crypto and blockchain and hailing it as the future of finance. Maire during a meeting of the Paris Fintech Forum said:
In France, we see #blockchain as an opportunity. That’s why we made the choice to create a tailored regulatory framework to promote innovation through blockchain technologies while protecting investors @ParisFinForum #PFF2019 #PACTE pic.twitter.com/qQyeaKCM0S
— Bruno Le Maire (@BrunoLeMaire) January 30, 2019
While France might be the latest country to enact bitcoin legislation; however, it is not the only one. Malta, also known as the “blockchain island” implemented similar legislation in 2018, and so did Singapore. However, economic heavyweights like the US and China have still not implemented crypto friendly law. In China, cryptocurrencies are outrightly banned, and in the United States, the crypto startups don’t enjoy any of the perks of a regular startup.