While regulatory clarify is a big point of confusion with most countries when it comes to cryptocurrency, France has passed a law that helps make theirs fairly clear: a law that allows blockchain-based businesses to access banking services and grants “visas” to ICOs and companies that wish to be licensed within France.
PACTE Law
PACTE Law’s goal is to help make a new legal environment that’s more favorable to the growth of small- and medium-sized enterprises, something that’s often neglected in our current atmosphere where some businesses have much higher barriers to entry. In the case of cryptocurrencies specifically, there are a few things it has brought that help crypto businesses:
- If a bank is to reject a crypto-based business from having an account, they will have to explain their reasoning to French regulators
- The French government will also have regulations in place that help support ICOs
- Outsiders can also get licensed to operate within the French government’s guidelines, allowing exchanges and other crypto businesses to legally operate under their framework through a “visa” program
All of these are fairly big when it comes to cryptocurrency, and even more important is that it’s not just great for one cryptocurrency, but rather all of them – plus businesses that wish to deal with crypto in some form or another.
Regulated by the Government
All of this comes with one important distinction: the bank accounts and licenses are all based on the assumption that businesses are willing to submit to regulation by the French government. A goal of this is to help protect people, while at the same time offering businesses the chance to legally operate and remove the gray area we all too often see where nobody even knows if something is allowed or not. As stated by the AMF, requirements for licensure are:
- “The obligation for the issuer of the tokens to be incorporated as a legal entity established or registered in France;
- The provision of an information document that will provide all relevant information on the token offer, the project to be financed and the company;
- The setting up of a system for monitoring and safeguarding the assets raised during the offer;
- Compliance with the Anti money Laundering and terrorist financing rules.
The visa remains optional and the raising of funds without AMF visa will continue to be legal in France. However, issuers who have not received the AMF visa will not be able to use general solicitation.” Furthermore, those ICOs that have received a visa by the government will also be on a list the AMF publishes.
As for projects that are decentralized in nature, they will not be able to fulfill the requirements to get licenses. As Domitille Dessertine, head of the FinTech, innovation, and competitiveness division at AMF has stated, “There are some business models that may not fit within a regulatory framework. I’m thinking of fully decentralized projects where you don’t even have an identified corporate issuer, where it’s really a community of people working together.” These are still able to operate legally, but under the guidelines that they can’t do general solicitation and they won’t be on the licensed list the AMF publishes.
For more reading, you can check out the official statement by the AMF here.