France‘s financial watchdog will be approving the first set of cryptocurrency-related companies under its new rules on digital currency, according to the report by Reuters.
The rules, scheduled to come into force later this month hold that all crypto-related firms should voluntarily abide by the standards on capital requirements and consumer protection, as well as paying taxes.
Companies dealing with digital currencies in France will have to comply with the new rules to gain approval from the country’s regulator.
According to the executive director for legal affairs at the Financial Markets Authority, Anne Marechal, “France is a precursor. We will have a legal, tax, and regulatory framework.”
Cryptocurrencies are subject to patchy rules, with the technology remaining mostly unregulated, more so with Facebook Libra. The plans to launch Libra digital coin increased scrutiny of cryptocurrencies, inviting politicians and financial watchdogs over privacy, consumer protection, and potential for systemic risks.
Coinformia reported the French Finance Minister, Bruno Le Maire’s reactions on Facebook’s unveiling of Libra, noting that Libra must not be allowed to ultimately become a replacement for sovereign currency issued by different countries.
Per the report today, crypto-related companies, including industry associations called for regulation of the sector, due to the perception of respectability that accompanies such rules and a desire for legal clarity.
France will be launching a task force via its presidency of the Group of 7 economic powers, to oversee how the central banks can ensure digital currencies such as Facebook Libra coin are regulated.
Anne Marechal further revealed that the country’s watchdog is in talks with “three or four candidates for initial coin offerings (ICOs),” including cryptocurrency exchange platforms, custodians, and fund managers.
The country had proposed rules last year to attract cryptocurrency issuers to France amid a boom for ICOs. However, ICOs have since dropped sharply, as they issuers instead turn to other forms of fundraising such as Initial Exchange Offerings (IEOs).