The France government has adopted a financial industry bill that creates a legal framework for crypto service providers and ICOs.
The bill includes both optional and compulsory licensing for crypto firms in the country. It also stipulates the kins of funds that can buy into crypto. The country’s financial markets authority, the Autorité des marchés financiers (AMF) published a report that contains the details of the new bill on Monday.
The Pacte Bill
The final text of the Action Plan for Business Growth and Transformation (Pacte) came into effect on April 11 during its last reading by the French parliament. On top of regulating the crypto industry in French, Pacte also gave AMF more powers that would help the watchdog govern the sector effectively. The bill was introduced two years ago on October 23. It was then submitted to the council of ministers on June 18 last year.
The AMF disclosed that the bill has 70 articles, regulatory and non-regulatory mechanisms, and tax measures that will be added in this year’s Finance Bill.
Crypto Services Providers and ICOs to have Optional Licensing
Pacte allows optional licensing for crypto service providers. Crypto service providers are firms that buy or sell crypto against fiats or other coins. They include crypto custodial services, brokers, dealers, remittance firms, asset management firms, advisory firms, and underwriting startups.
Regarding the application of optional licenses, the AMF said,
Whether or not they choose to obtain the optional license, service providers who wish to provide digital asset custody services to third parties or to purchase/sell digital assets in exchange for legal tender are subject to mandatory registration with the AMF.
The bill also gives ICO projects the choice of applying for approval from the AMF if they meet the set standards. For the regulator to approve ICOs, their issuers must be legally registered in France. They should also be in a position to give sufficient details on the token, the project, and the firm. The issuer must also have a system that tracks and safeguards the funds obtained during the token sale. Additionally, the issuer must comply with AML and CFT requirements.
AMF further stated that,
The raising of funds without AMF approval will continue to be legal in France. However, issuers who have not received the approval of the AMF will not be able to solicit the general public … The AMF will publish the list of ICOs that have received its approval.
Funds Permitted to Invest in Crypto
Pacte allows two types of funds to invest in crypto. These are,
- Professional specialized investment funds. However, they must comply with the liquidity and valuation regulations that apply to them.
- Professional private equity investment funds. These investments must fall under a 20 percent limit of the funds’ assets.
While none of the above funds don’t need AMF’s authorization, they must make a declaration to the regulator within a month of their creation.
AMF’s Powers Boosted
The Pacte bill gave AMF the authority to supervise approved ICOs and crypto service providers. The regulator also has the power to blacklist non-compliant firms. On top of this, the watchdog can block access to fraudulent sites that offer crypto services.
Do you think creating crypto regulations in France will foster adoption in the country? Let us know in the comments below.