France continues to make moves towards adopting cryptocurrencies, with the country's regulator making preparations to approve its first group of crypto-based companies. The new rules and regulations regarding digital assets are almost ready to be launched, and will dictate the future of cryptocurrency in the country.
The new regulations are expected to arrive later this month. They will bring new standards in regards to capital requirements, consumer protection, and tax payments in France, and the companies will be expected to abide by them voluntarily. In exchange, they would receive official approval from the country's regulator.
France's Financial Markets Authority executive director for legal affairs, Anne Marechal, stated that the authorities are already in talks with several ICO candidates. Further, she admitted that the country's regulator is also negotiating with several cryptocurrency exchanges, fund managers, and even custodians.
The problem with cryptocurrencies around the world is that they are mostly subject to bad, patched-up rules. Meanwhile, technology is still mostly unregulated. There are a few examples of countries that did manage to come up with crypto-specific laws, such as Malta, Belarus, and alike. However, most of them are still trying to apply laws that are already in place, and were designed for traditional finances industry.
Meanwhile, the global scrutiny of crypto surged even higher in recent months, when it became apparent that Facebook really does plan to launch its own digital currency. The last month's announcement of Libra, which will bring the social media giant into the crypto space, raised strong concerns among regulators and politicians around the world. Naturally, the most concerned are the US authorities themselves, with issues like consumer protection, privacy, and a high potential for systemic risks being among primary issues.
Even cryptocurrency-related firms, and others involved with the industry have requested that regulators grant additional attention to the sector, and design appropriate regulation. Their reason for such demands only partially lies with the desire for cryptocurrencies to achieve legal clarity. Another reason is the perception of respectability, which is expected to arrive alongside the regulations.
A New York-based crypto platform that will launch its ICO in France, LGO, had its co-founder, Frederic Montagnon, comment on the situation. He said that the worst that can happen to entrepreneurs is to launch their business in an unregulated environment, and then see it develop regulations that might damage the entrepreneur's entire business.
This is why countries like France, which are, in fact, launching sets of firm rules and guidelines, are attracting more and more businesses. France itself is using its Group of 7 presidency to create an entire task force that would oversee central banks, and monitor their attempts to regulate cryptocurrencies, particularly the ones such as Facebook's upcoming Libra.
To that extent, the European Central Bank policymaker, Benoit Coeure, is expected to submit a report regarding the issue later this week. Coeure will have an opportunity to do so during the G7 meeting in Chantilly, north of Paris.
It is quite impressive what France already managed to achieve on the crypto front, considering that Paris proposed rules to attract digital coin issuers only last year, while ICOs were still popular. Hundreds of coins emerged as a result, allowing issuers to raise billions of euros each month. However, the crypto winter of 2018 soon caused the ICO popularity to drop.
The regulators' crackdown and investors' skepticism prevented many from joining the token sales, and the ones already scheduled in the second half of 2018 did not see nearly as much success as the ones in 2017 and early 2018. Instead, investors started turning to STOs and IEOs, particularly in the first few months of 2019. These models were not only safer, but also more regulated, especially when it comes to Security Token Offerings. But, with the ICOs returning in 2019, the proper regulations appear to be in high demand once again, and France appears to be among the best countries for registering new crypto businesses.
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