The potential benefits of cryptocurrency and blockchain have left a deep impression on France that after devising crypto regulations last week is now urging other European Union (EU) countries to follow in its footsteps. The message to other EU states was conveyed by France’s Finance Minister Bruno Le Maire during his speech at Paris Blockchain Week Summit.
A week ago, France passed a bill, Plan d’Action Pour la Croissance et la Transformation des Entreprises, also known as PACTE, that clarifies country’s latest stance on cryptocurrencies and blockchain.
According to Le Maire, the framework France has come up with is not only perfect for the country itself but also advisable for other EU countries. The finance minister was so confident with the country’s latest model that he reaffirmed his consent by calling it a ‘Right Model’. His call to other EU states and advice to follow France’s way of dealing with crypto and blockchain shows the level and extent of trust and confidence he possesses in country’s current regulatory model. In this regard, his exact words are:
I will propose to my European counterparts the setting up of a unique crypto active regulation framework inspired by the French experience. We will also continue to encourage work on this topic at the G20 level.
France had been contemplating over crypto regulations for quite some time. At first, the response toward blockchain and cryptocurrency was extremely unwelcoming but later on Le Maire admitted his mistake, undermining the opportunities rising from accepting cryptocurrencies and blockchain. Since then, Le Maire has been passionately trying to make France the leader of the world as far as cryptos are concerned.
He revealed his mindset while having breakfast with the president of Chaintech and co-founder of Blockchain Partner, Alexandre Stachtchenko. As quoted by Stachtchenko, Le Maire stated:
I was a neophyte a year ago, but now I’m passionate, but it took me a year, let’s take a lot of pedagogy with our fellow citizens to make France the first place in the world. Blockchain / cryptos innovation in EU.
PACTE governs France’s new crypto framework by introducing certain rules and regulations for crypto projects and businesses. As per the bill, all businesses, before starting operations, are required to provide information to acquire a certificate. Providing details such as background knowledge of founding members, business plan and anti-money laundering compliance were made mandatory for businesses applying for certification. By doing so, France is ensuring that people behind such projects are thoroughly supervised and verified.
Moreover, the bill allows projects to raise funds through a cryptocurrency sale such as initial coin offering (ICO). France is the first country to bestow such freedom to crypto projects. Many crypto enthusiasts and investors had only wished that governments provided them with such ease of doing business by taking similar initiatives and measures. Now, France has opened doors of opportunity for all those interested, irrespective of their geographical location. Businesses based in other countries are also welcome to freely run their projects in France after getting certification from the government. As most countries have strict regulations regarding ICOs, it wouldn’t be a surprise if new crypto projects rush to France.
Apart from relaxing crypto enthusiasts, the bill introduces taxation on all profitable crypto activities. This is the primary motivation for ,many governments as cryptocurrencies can be used as a way out by traders not willing to pay tax. Through regulations, governments can recognize cryptocurrencies and immediately impose a tax on profits earned. This practice is even adopted by countries such as Pakistan where cryptos are strictly banned and many trading activities go by unnoticed.
Aforementioned adjustments made by France through the bill make country’s plans and aims evident. As proposed by Le Maire, France is looking forward to leading Europe on blockchain technologies and associated cryptocurrencies.
La France a tous les moyens pour devenir un pays leader en Europe sur les technologies #blockchain : des start-ups qui réussissent dans ce domaine, des centres de recherches et de formation, des grands groupes qui l’expérimentent. #ParisBlockchainConference pic.twitter.com/hdHwaw7t3I
— Bruno Le Maire (@BrunoLeMaire) April 15, 2019
France is not alone in trying to unite all EU states. It is accompanied by the European Commission that is also keen to develop a unified framework for regulating cryptocurrencies and blockchain for the entire region. According to current EU financial laws, crypto activities at present are unrecognizable as they aren’t dealt or covered by any law. They were regarded as ‘high risk’ activities. It is quite unfortunate that despite aiming to unite EU states, the commission has not been successful in gathering consensus to build a regulatory framework well suited to all EU countries.
Lack of regulation for cryptocurrency and blockchain along with hindering mass adoption pave way for illegal activities such as money laundering. Therefore, it’s more of a call of the hour than a choice to regulate cryptocurrencies and blockchain. While France comprehends this aspect and has offered comfortable ground to even coin issuers, in addition to investors and crypto enthusiasts, it will be interesting to see how other European countries respond to France’s call. After all, even European Commission has already failed in getting all EU states onboard a singular regulatory framework.