After making a 180-degree shift in policy regarding crypto, France has drawn the attention of all the major blockchain-oriented news outlets. A recent ban of 15 cryptocurrencies announced by French regulators has been followed by a huge step towards adopting digital money. Turns out, the authorities are very serious about making the country, by their own definition, “the first major financial center to propose special legislation for companies holding ICOs.” To support this statement, France has accepted a new draft law designed to regulate coin offerings.
What has convinced France to make this U-turn? What is the situation with crypto in general? Strap on your beret — it’s time for our weekly World CryptoMap!
Clearly, the French government is gradually changing its negative stance on digital currencies and ICOs. The Minister of Economy and Finance of France, Bruno Le Maire, announced that the legal ICO framework had just been accepted. The framework will provide safeguards and guarantees to investors — now companies that want to hold an initial coin offering must first get a special “visa” by submitting their whitepaper to the authorities for review.
The fresh initiative has been met with enthusiasm by the crypto community. Since France plays a pivotal role in the political and economical life of the European Union, its vote for crypto will be heard. Pierre Noizat, the CEO of Blockchain.io, a new platform that has already been shortlisted to obtain an official ICO visa license, said:
“The French government is not hiding its ambition to make France an ICO capital, as they do not want to miss out on the blockchain revolution. They are regularly speaking with French blockchain and crypto-entrepreneurs in France in order to get a better grasp on the market, to understand its problems, and to regulate the market accordingly.”
The funny part, is that it wasn’t that long ago, calling cryptocurrencies “shady” was common for the State bodies. In December of last year, the Governor of the Bank of France, Francois Villeroy de Galhau, issued a warningon the high risks of investing in Bitcoin, claiming it is a speculative asset, and neither a currency or a digital currency. Around the same time, the Frenchstock market regulator, added 15 cryptocurrency and crypto-asset investment websites to a blacklist.
There are various relevant blockchain companies with international recognition. The most well-know are Ledger and iExec. Ledger operates in the field of crypto-security and cold storage. And iExec is now among the leaders in decentralised cloud computing.
However, the general blockchain startup ecosystem looks less dynamic compared to that of the United States, but also compared to other European countries such as Germany or the UK. Why so? Partly, because of the country’s conservatism — historically, it has never been easy to start a business in France. This situation, however, has been changing radically over the last years. Moreover, boosting entrepreneurship was one of the main axes of Macron’s presidential campaign.
Here’s another evidence illustrating the authorities’ willingness to support the industry. In April 2018, the cryptocurrency tax rate was dramatically cut from 45% to a flat 19%. The investors just couldn’t have been happier! The thing is that from 2014 until April, cryptocurrency gains have been classed as industrial and commercial profits (French abbreviation BIC) or as non-commercial profits (NBC), resulting in a capital gains tax of 45 percent for high earners. A number of French taxpayers challenged the classification by the Council of State and won, resulting in a verdict that significantly reduces tax burdens for most French investors. Crypto gains were clarified as “movable property” — in France the term refers to tangible and intangible assets, including vehicles and jewelry, but also to less physical items, like patents and copyrights.
The country is one of the most visited in the world, and it seems normal that payment methods there are advanced. For example, Paris has countless boulevards full of shops of all kinds, and many of them are more than ready to accept your payment in crypto. If you’re a true Bitcoin evangelist, then be sure to visit La Maison du Bitcoin, the first Bitcoin centre in Europe, a space for the meeting of entrepreneurship and Bitcoin. There is even a Bitcoin ATM for your convenience! Looking for a romantic night out? Try Le Pitcoin, a small, stylish Parisian bistro which recently started accepting Bitcoin. Another place you can use crypto is O’CAIRE, a little bar that serves some high quality drinks. Of course, this is by no means a complete list!
Despite a few complications in the past, there is little doubt that the French authorities have a positive attitude and outlook when it comes to the future of cryptocurrencies. The country used to be wary of adopting new technologies, but now it’s getting on board quickly. It can be illustrated by the country’s willingness to regulate the industry and the growing number of blockchain startups.