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France: How Loi Pacte Can Be Revised

Denis Goncharenko

You can’t change your reputation with a snap of a finger, it’s very true. Despite France’s long-going changes to the views on blockchain and cryptos, one can still consider the release of ICO regulatory framework by AMF as a ‘snap’. Though the innovation-friendly president Macron is passionate about new technologies and urges to finance the future-oriented projects, France is still considered conservative and cautious especially when the political affairs are involved, as Oleg KOLDAYEVwrote earlier.

Obviously, such persons as Jean-Pierre Landau, known as "Monsieur Bitcoin," represent the attitude of the political and economical establishment towards new era of innovations. Calling Bitcoin the “Tulip mania of 21st century” was not something the French crypto enthusiasts were waiting for. So it seems that France got stuck between the quite conservative political correctness and the urge to catch the fast-moving train of FinTech.

Indeed, their recent moves can be called positive, but that is not enough to compete with other jurisdictions, which are more definite in their decisions and more attractive for business. Richard SHIBI, the ICO consultant, blockchain enthusiast and constant contributor of Bitnewstoday.com, calls a spade: “In order for France to lead the blockchain revolution, they must ease the regulatory framework even more when it comes to FinTech & blockchain. If we take cryptocurrency taxation as an example, it is 19% fixed in France, reduced from the considerable 45% this year. Looks loyal? Consider Switzerland, where crypto & ICO tokens can be taxed as low as 1%. Even with the new framework released by AMF,  every ICO in France must obtain a visa, while in Switzerland any ICO which is dealing with funds below $1mln is allowed to experiment under a ‘Sandbox Regulatory Framework’, which means that high flexibility and more tolerance is provided. Such differences result in Switzerland raising more than 6.5 times of capital for ICOs than France. Even a small country like Estonia has 60% ICOs more than France. The key is to be more tolerant in order to allow enough space for innovation.”

It’s the uncertainty that may deter

For the last year a vast number of European jurisdictions has shown that they are certain enough in what they’re doing: Malta, Gibraltar, Belarus, Switzerland — all of them found the balance in certainty of regulation framework and the speed of adoption. In case of France, a role of a European Union leader and strict compliance with Bruxelles directives may do kind of a disservice, and the official Paris is still very careful, always looking back and around before making decisions. Jordan COHEN, CEO of pharmaceutical blockchain company and a French healthcare entrepreneur, is quite concerned that we did observe the final version of legal frameworks: “AMF is working really hard to present France as a leader in blockchain, ICO and STO. It will settle a great environment to attract great projects, so the will from France for being one of the top country for crypto is clear. But they have to make some big efforts to succeed: the Loi Pacte from the Minister of Economy is still being awaited and we don’t know exactly how far they will go on the regulation.” Richard SHIBI supports these concerns believing the time is not on their side: “It is not only the competition between jurisdictions that matters, but also the risk of not having the proposals and recommendations being adopted as laws. At this stage, there are many positive proposals, but the regulatory framework in France is a bit rigid and lengthy, so during the approval process there are many stages at which such recommendations can be rejected as a governing law. The Minister of Economy and Finance, Bruno LE MAIRE has proposed a lot of positive ideas, however the French legislative system demands that the government submit an identical text to both the National Assembly and the Senate to approve such proposals.”

Therefore, time is always the key factor that matters for the entrepreneur, especially when it’s about the emergence of new opportunities never seen before: a stitch in time saves nine. The good efforts may come to naught, if the business wouldn’t trust France’s good intentions and choose other jurisdictions.

Kori LEON, a founder of pharmaceutical blockchain company from France, is occupied with the same thoughts: “There is little capital in France for ICO, but the government wants to push innovation and especially, the blockchain. We can illustrate that with Mounir Majoubi visiting ChainAccelerator in Station F, the biggest European startup campus. I expect that AMF will try to facilitate ventures who wants to build ICO or STO. Still, it will take a long time to go and as the market is evolving fast, I'd recommend entrepreneurs to find the best jurisdictions for their ventures. Do not wait.”

Lucky for France, uncertainty is a global pandemia

I believe that the Republic will get the positive ROI in the end of all this. One of the reasons is that France is not the one and only suffering from the uncertainty and lack of knowledge. The tectonic political and economical shifts shake the establishment day by day. Ethan PIERSE from CryptoAssets Institute, Paris, believes that the stated requirement for bringing projects’ HQs to France wouldn’t deter businesses after all: “The main issue is that the project must be headquartered in France to qualify for the ICO visa. That’s not an obstacle, as there are many reasons why you’d already want to base a European company in France, especially now that Brexit questions have made the UK less attractive for any activity that will need to conform to EU regulations.”

“It is all a matter of perspective: if we compare France to China, surely France will get points while China ranks zero attractiveness right now. There is still room for improvement, France is definitely on the right track, if they keep on amending the current regulations to favor blockchain. One day they can take the lead, assuming that this is only the start. If so, then for sure, within few years they can win this race in Europe,”Richard SHIBI underlines and concludes the whole idea behind the concerns of French entrepreneurs. It would be pretty bad to realize that the good intentions and investments will be saddled with the so-called riffs of bureaucracy and freezing uncertainty.

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