After slashing taxes on profits made from cryptocurrency trading by more than half, France has now implemented a new legal framework for initial coin offerings (ICOs). Is Europe’s third largest economy transforming into a haven for cryptocurrency?
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French Lawmakers Adopt Legal Framework For ICOs
French lawmakers have passed a law setting out guidelines for initial coin offerings (ICOs), Finance Minister Bruno Le Maire has announced.
Mr Le Maire said on Twiitter that Article 26 had been “adopted in (parliamentary) committee”, as part of French President Emmanuel Macron’s broader plans to improve business growth and transformation.
“A legal framework for ICO is created,” he said, in translation. “This legal framework will attract innovators from around the world #blockchain…”
The legislation enables the French financial regulator Authorité des Marchés Financiers (AMF) to approve and issue permits to businesses intending to float ICOs in France – but only if “those projects provide specific guarantees for investors.” Issuers will be expected to give full disclosure to the AMF, allowing buyers to make informed decisions about the ICO. The French regulator has previously raised concern over the lack of clear regulation on token sales “as an inherent risk factor of ICOs”, heightening the possibility of loss, money laundering and terrorist financing.
In an initial coin offering, companies raise money by creating new digital coins and offering them to the public for sale.
ICOs imitate initial public offerings common with stocks, but without the rigour of regulatory oversight, which in a sense makes them attractive to start-ups keen on getting around bureaucratic red-tape.
New Haven For Cryptocurrency?
Under President Macron, France is trying to transform itself into a haven for business, including the business of cryptocurrency. Earlier this year, Mr Macron launched the Action Plan for Business Growth and Transformation (PACTE), which, among other things, aims to make it easy for companies to operate in France, and to lay out legal guidelines for fund raising via token sales.
The AMF began public consultations leading to the new law on ICOs – passed September 12 – some months back. In July, the French administration cut the cryptocurrency tax by more than half to 19 percent, in a move largely viewed as positive for the development of crypto and the blockchain ecosytem in the world’s sixth largest economy.
Explaining the new legal framework in June, law firm Kramer Levin said: “… (the legislation) provides a definition of tokens, indicating that a token is intangible property representing, in numerical form, one or more rights that can be issued, registered, conserved or transferred using a shared electronic registration mechanism that facilitates the identification, directly or indirectly, of the owner of said property.”
Will France become a new home for cryptocurrency? Let us what you think in the comments section below.
Images via Shutterstock.
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