It’s time to take stock! – As expected, the deputies Éric Woerth and Pierre Person presented an information report to the National Assembly on December 1, 2021 on the implementation of the recommendations relating to the regulation of crypto assets, made by the fact-finding mission. This report aims to summarize the recommendations met and not met with the entry into force of the PACTE law in 2019. It also helps to point the finger at concepts that still need to be framed, such as that of non-fungible tokens (NFT). Finally, he recalls the objectives that must be achieved in order to maintain France’s competitiveness in terms of crypto assets.
State of play of the implementation of the recommendations of the fact-finding mission relating to crypto assets
The information report reported by the deputy Eric Woerth takes up the recommendations made in January 2019 by the fact-finding mission. The latter had been created by the finance committee, he was responsible for it. presidency while Pierre Person was the rapporteur. Almost three years after these recommendations, they take stock of what has been done and still needs to be done to continue to “shake” the legislator when it comes to active crypto.
In total on 27 recommendations and proposals made by the fact-finding mission, 11 were satisfied and 5 partially is a 60% rate.
Terminological recommendations
First of all, one of the first recommendations of the fact-finding mission related to the definition of digital assets and related activities, favoring the creation of a adapted definition rather than compartmentalizing them within an existing legal framework.
This recommendation has been satisfied by the PACTE law of 2019 which established a definition of digital actions in the Monetary and Financial Code (CMF). In addition, she also introduced the definition of five categories of digital asset services.
Recommendations relating to taxation
However, for tax proposals only 4 of them were fully satisfied, and a partially on the 13 that had been formulated. In comparison with the other proposals, this is little! And yet the focus has long been on some recommendations that still have not been met. In this respect, the proposal aimed at increase the annual allowance on disposals of crypto assets of 305 € to 3000 €. Another proposition reiterated several times, but which never been consecrated by the legislator is the one allowing to consider that only repatriation to a bank account would be an operative event tax on capital gains on disposal.
Moreover, with regard to companies, the proposal to align the tax regime of the attributeuse of free tokens on that applicable to allocation of free shares did she too never been satisfied.
Finally, the report notes that the relations between the banking sector and that of digital assets “still struggling to normalize”. Therefore on the tax proposals, as well as concerning the reception of digital assets by banks the balance sheet is mixed.
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Recommendations for Digital Asset Service Providers (PSANs)
Regarding the status of PSAN, one of the proposals was to clarify the definition of “digital asset services” and those of asset conservation. This, like the one proposing to set up a differentiated visa depending on the type of PSAN activity, was satisfied.
In addition, the fact-finding mission recommended reduce the study of applicants’ files to PSAN status. According to the report, this instruction and the procedure for registering PSANs remain too long. Moreover, the giantBinance exchange actually the painful experience.
The objectives to be achieved to preserve the economic future of France in the face of crypto assets
First of all, one of the objectives of the remaining proposals concerns the French training blockchain technologies. It was indeed recommended to include modules of blockchain training in L’secondary and higher education. This proposal aims to training the crypto entrepreneurs of tomorrow which will ensure a certain competitiveness of France vis-à-vis digital assets.
However, the report notes that the proposal to create an association bringing together the main players in the crypto sector active in France was satisfied. In fact, since 2020 these professionals have come together in theAssociation for the Development of Digital Assets (ADAN). Initially, this association only had about ten members, while today nearly 70 cryptosphere companies are part of.
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Regulatory issues raised by crypto assets
In the second part of this report, they are the new challenges facing the digital asset market that are discussed. The two deputies start from the observation that the COVID-19 did not have a detrimental effect on this market, which was on the contrary the ground of increasingly innovative projects. They then present the case of Salvador, which as a reminder is the first country to have adopted the Bitcoin (BTC) like legal tender since September 2021.
However, this case still remains on the fringes and the development of stablecoins as well as central bank digital currencies (MNBCs) remain the two major developments. However, especially when it comes to stablecoins, the report notes that they suffer from a cruel legal vacuum, in the same way as the decentralized finance (DeFi). France and the European Union (EU) more broadly must imperatively lean on these by adopting an rbalanced regulations. Indeed, the management will have to counter systemic risks while preserving their attractiveness.
When the subject of MNBC is mentioned, and more precisely the project ofdigital euro the report states:
“The digital euro project will not be successful for several years: it is a delay that seems long compared to the speed with which financial technologies are evolving (…)”.
Thus, according to the fact-finding mission, the urgency seems rather to be found in the supervision of stablecoins than in the creation of an MNBC. Yet the EU and France do not seem to agree. Moreover, none of the proposed amendments for the finance law for 2022 did not concern the treatment of stablecoins.
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