By CCN: France is pushing the boundaries with its new crypto regulatory framework, which it unveiled a week ago. Now the government plans to pressure other EU states to take the “right” approach to crypto regulation. French officials are acutely aware that the blockchain is an emerging field with proven risks, and they have employed a heavy screening burden for projects seeking to sell crypto assets.
France’s Finance Minister Bruno Le Maire has been setting the tone for this week’s Paris Blockchain Conference and didn’t mince words:
“I will propose to my European partners that we set up a single regulatory framework on crypto-assets inspired by the French experience. Our model is the right one.”
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
Inside France’s Crypto Bill
Last week, France’s parliament gave the green light to a finance law that addresses the treatment of cryptocurrencies. The policy includes specific screening and documentation requirements for crypto projects housed locally. Businesses from around the world may apply for regulation within France to take advantage of the new regulations put in place by the bill.
Upon being thoroughly vetted, businesses can receive a certificate from the French government. Some information required for certification under the new crypto regulation framework includes:
- Personal background checks for project founders and/or advisors
- Business plan verification
- Project AML compliance information
Other EU Countries Feel the Heat
Other EU countries must rise to the occasion. Otherwise, if they fail to meet or exceed the standard offered by France, they risk losing tech innovation to other jurisdictions. If they shoot too high, investors might get burned.
Beyond losing business, other EU members risk losing out on taxes provided by investors. If projects are registered and regulated in France, the funds sent by investors will become taxable by France. Other countries, however, can still reap some of the benefits of tax funds when investors and speculators generate capital gains.
EU regulatory changes are not expected until year-end 2019 or later.
What Does This Bill Actually Change?
This bill provides a clear way forward for projects seeking to raise funds through a cryptocurrency sale under the new crypto regulation framework. Other governments have offered a sandbox-type environment. The regulatory clarity provided by France, however, is something that crypto projects, investors, and enthusiasts have been begging governments for since the first ICOs launched several years ago. The EU doesn’t have to go it alone.
Le Maire said last week:
“I will propose to my European partners that we set up a single regulatory framework on crypto-assets inspired by the French experience.”
France is making a strong statement in favor of realizing crypto as a viable technology and asset class. Through clear regulation, all parties involved in the emerging sector can benefit from increased transparency.