France to Implement Cryptocurrency Regulations by 2024
Introducing: Qadir A.K, Crypto Enthusiast and Research Columnist
Welcome to the latest installment of my writing series, “The Cryptocurrency Breakthrough 2020 – Synopsis 14”. Today, we will be discussing cryptocurrency regulations in France.
France, a modern country that prides itself on being a leader among European nations, has recognized the importance of blockchain technology and cryptocurrencies. As a result, the government has developed a comprehensive plan to foster innovation in this field.
The French government has taken a positive stance towards cryptocurrencies and has implemented necessary regulations. These regulations are overseen by regulatory bodies such as the Authority des Marches Financiers (AMF), the French Prudential Supervision and Resolution Authority (ACPR), and the Agence Nationale de la Securite des Systemes information (ANSSI), which is responsible for cybersecurity.
France has already witnessed the launch of major blockchain projects, which have paved the way for the country’s cryptocurrency future. For example, Tezos, a blockchain network connected to a digital token called “tez” or “tezzie”, has been utilized by the French army to authenticate judicial expenses.
Initially, the AMF had a skeptical view of cryptocurrencies and even blacklisted some crypto websites. However, the authority has since changed its position and now supports digital assets and ICOs. French Minister Bruno Le Maire has expressed full government support for the blockchain and crypto sectors, stating that “France will not miss the blockchain revolution.”
The AMF has introduced new rules for digital asset service providers, known as the PACTE law. These rules align with the EU 5AMLD and require digital asset service providers to offer certain services, such as custody, buying or exchanging digital assets for fiat currency, trading digital assets for other digital assets, managing digital asset portfolios, and providing advice to investors.
To register with the AMF, service providers offering custody services or facilitating the buying or selling of digital assets for fiat currency must meet certain requirements. These include having a cybersecurity program, a two-year business plan, a list of digital assets to be offered, an internal control system plan, an insurance claims procedure, an IT system plan, a plan to prevent money laundering and terrorist funding, information on geographical location, and at least one senior manager. Additionally, service providers must submit indemnity insurance or a minimum amount as reserve funds. Once registered, technical audits are conducted to prioritize cybersecurity.
France has also implemented a new legal framework called the Business Growth and Transformation Law (PACTE law) to remain at the forefront of blockchain technology. This law governs digital assets, digital asset service providers, and ICOs.
In terms of taxation, France imposes taxes on cryptocurrency gains in two scenarios. Firstly, when gains are earned through trading and mining, progressive income tax of approximately 45% and additional social contributions are charged. Secondly, companies dealing with cryptocurrencies are subject to corporate gains tax of 33.3%, which will gradually reduce to 25% by 2022.
Cryptocurrency mining is permitted in France and is not heavily regulated. However, profits generated from mining are taxed under the progressive income tax, accounting for approximately 45% of the gains.
France has witnessed several important events related to cryptocurrency regulations over the years. These include the Bank of France’s announcement of an experimental program on central bank digital currency, the release of new rules for crypto firms by French regulators, the adoption of the PACTE plan by the French National Assembly, the introduction of taxes on cryptocurrency gains, and the establishment of a legal framework for ICOs.
Overall, France has embraced cryptocurrencies and their potential, recognizing them as legal entities. The country’s progressive approach to regulation and implementation of blockchain technology is expected to contribute to the growth of the cryptocurrency industry and boost the economy.
I hope you found this information helpful. If you have any further questions, please refer to the FAQ section below.
FAQ’s:
1. What is the regulatory stance of the French government towards cryptocurrencies?
– The French government has a positive approach towards cryptocurrencies and has implemented necessary regulations overseen by regulatory bodies such as the AMF, ACPR, and ANSSI.
2. What are the requirements for digital asset service providers to register with the AMF?
– Digital asset service providers offering custody services or facilitating the buying or selling of digital assets for fiat currency must meet several requirements, including having a cybersecurity program, a two-year business plan, a list of digital assets to be offered, and an internal control system plan, among others.
3. How does France tax cryptocurrency gains?
– France imposes progressive income tax of approximately 45% and additional social contributions on gains from trading and mining cryptocurrencies. Companies dealing with cryptocurrencies are subject to corporate gains tax of 33.3%, which will gradually reduce to 25% by 2022.
4. What events have taken place in France regarding cryptocurrency regulations?
– Several important events have taken place, including the adoption of the PACTE plan by the French National Assembly, the introduction of taxes on cryptocurrency gains, and the establishment of a legal framework for ICOs.
5. How is cryptocurrency mining regulated in France?
– Cryptocurrency mining is permitted in France and is not heavily regulated. However, profits generated from mining are subject to progressive income tax.
Please note that this information is accurate at the time of writing and is subject to change.