The cryptocurrency and blockchain situation in Europe continues to progress, with France, in particular, currently making moves to embrace the blockchain and start issuing digital assets. When it comes to security tokens, there are not a lot of issues, as they will be regulated in pretty much the same way as regular securities. However, utilities are a different matter entirely, and the country has been working hard on creating a regulatory regime that would properly address and support them.
Back in December 2018, the French government issued a new decree which outlined some of the ways that the blockchain can be used for issuing securities. This made it the first country in Europe to make such a move and was greeted by the crypto community with great enthusiasm. Of course, the document never directly addressed DLT or even mentioned blockchain technology. However, the language that was used still aligned with the intent to allow facilitating security tokens.
Then, there was the matter of Initial Coin Offerings (ICOs). France dealt with the issue in quite a unique way by creating legislation that allowed the issuance of tokens that are not considered securities. The country's embrace of new technologies is likely expected to attract new entrepreneurs, developers, and companies dealing with digital currencies. Further, as many have suggested, it might also encourage other establish firms to start dealing with blockchain and crypto.
Of course, some officials within the country remain cautious, or even skeptical in regards to the new technologies. One MP pointed out that it should not be allowed for blockchain to become a new 'Minitel.' which was the country's attempt to guide the internet back in the 1980s. The project was quite long, particularly when it comes to its campaign to reach mass adoption. However, it was finally ended in 2012.
For now, the language used in the country's Pacte Law allows ICO issuers to hold token sales and raise capital. They are also allowed to trade said tokens in a secondary market. Of course, this is only allowed for those tokens and coins that are not deemed securities. To ensure that everything is in order, token issuers are advised to contact the AMF (French Autorite des Marches), although it is not a requirement for holding a token sale. However, those who choose not to seek the AMF's approval must specifically point out that they chose not to do so.
Additional reports stated that the country is promoting its approach at the European Commission, alongside potential adoption.
Recently, several industry supporters decided to join up and create the FD2A (French Digital Asset Association), which aims to nurture the fintech sector, but also promote industry-supportive regulation at EU, as well as the international level.
One of the biggest questions now is whether the country actually succeeded in creating a reasonable regulatory regime that would allow ICOs that sell actual utilities. For now, there is no definitive answer, although the fact that the law will become actionable in days to come indicates that the question will soon receive an answer.
One potential answer may have already come from the attorney Thibault Verbiest, who is quite familiar with regulatory discussions, both in France alone, as well as at the EU level. Earlier this year, in March, he also reviewed the Pacte Law, attempting to predict some of the issues that might emerge along the way. He then predicted that the Law would become actionable in June, which is much earlier than originally believed.
He also stated that there would be a few positive consequences of allowing utility token sales, such as the change in the attitude of the banks, which refused to deal with crypto-related businesses up to this point. Further, he also says that licensed ICOs are likely to get their own bank accounts.
Next, another positive outcome predicted by Thibault is the improvement of the quality of operations, which is expected to significantly enhance the image of the crypto space in France. Thibault says that the new regime will only allow serious businesses, meaning that the sector will receive more trust from the investors. Also, while many believe that a surge in the number of crypto exchanges in France is to be expected, all that Thibault has mentioned is the fact that some of the major, established ones are currently applying for a license.
However, Thibault also mentioned that it is likely that crypto exchange licenses will become available at some point after the ICO regime goes live, as it requires entirely different legislation which has yet to be adopted. However, that still does not mean that crypto entrepreneurs are not interested, as Thibault claims that many see France as a new, untapped market. It is also the only big country with a crypto-friendly regime in Europe. Despite that, he still says that the regime remains optional, although it is an important element.
As for the rumors of France attempting to present its ICO rules to the EU Commission and have them adopted throughout the European Union, Thibault confirmed it. He also added that he sees it as a good approach. Finally, he also commented on the competition that France would see from smaller countries, such as Malta, or Switzerland, although it is not in the EU.
Thibault stated that he sees it as a good, positive thing, as entrepreneurs based in Malta might decide that they are interested in a French visa. As for Switzerland, it will continue to act as an international crypto financial place, considering the fact that it is not an EU member.
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