France appears set to move ahead with its plans of introducing cryptocurrency regulations to police several aspects of the industry. Numerous commentators in the country have urged the European Union (EU) to establish region-wide standards for virtual currency governance.
With the EU yet to make significant progress in this regard, it appears the country is deciding to take its own first steps on the matter. Meanwhile, financial regulatory authorities in France say they will continue to keep a watchful observance over the controversial Facebook Libra cryptocurrency project.
Cryptocurrency Regulations in France Imminent
According to Reuters, France is ready to unveil a regulatory framework for cryptocurrencies. These cryptocurrency regulations will cover initial coin offerings (ICOs), exchange platforms, wallet providers and custodians, as well as, virtual currency investment fund managers.
France has always been keen on taxing technology companies and as such, the new crypto regulatory paradigm also includes tax laws. In all, the framework that is set to go live appears to provide robust governance for the tax, legal, and regulatory provisions necessary for the effective policing of the country’s crypto industry.
Concerning ICOs, there are reports that regulators are already in talks with some companies looking to launch their projects in the country. ICOs have come under increasing scrutiny across several jurisdictions with concerns majorly revolving around the sale of unlicensed securities. Thus, ICO fundraising has also suffered a major decline since the highs seen in 2017 and 2018.
Back in April 2019, Blockonomi reported about the warnings issued by the French stock market regulator of the dangers of cryptocurrencies. At the time, the Autorité des Marchés Financiers (AMF) declared that bad actors were using the novelty of the digital asset space to defraud inexperienced investors.
The imminent regulations also put a pin in reports of a possible cryptocurrency ban in France. Several major stakeholders in the French government and within regulatory bodies have in the past, called for a cryptocurrency prohibition within the country citing concerns over tax evasion, money laundering, and the other usual anti-crypto soundbites.
No Longer Waiting for EU-Wide Standards
Reports indicate that the new cryptocurrency regulations will come into effect before the end of July 2019. According to Anne Marechal, the executive director for legal affairs at the country’s Financial Markets Authority, France is leading the way in creating a robust regulatory framework for cryptos among the major economies of the world.
Aside from nations like Japan and South Korea, many large economies have yet to put forth concrete governing structures for crypto commerce in their respective countries. Nations like China and India have preferred to totally or partially ban crypto-related activities.
France’s decision to push ahead with crypto regulations might also signal a growing frustration with the EU’s inability to provide a region-wide template for regulating digital assets. In the end, if more European nations follow France’s example and create their own crypto laws, then the regulatory arbitrage which the EU doesn’t want might become the reality.
Keeping an Eye on Facebook’s Libra
While the country looks set to roll out cryptocurrency regulations, it is still skeptical about Libra — the digital payments project currently being developed by Facebook. There are reports that France wants to exert pressure on the G7 to ensure that major economic powers strictly regulate the project.
France isn’t the only nation wary of the Libra project as the U.S. Congress continues to grill the project team. Even U.S. President Donald Trump and Treasury Secretary Steve Mnuchin have weighed in on the matter, expressing serious reservations about the project.