France has rolled out a new cryptocurrency law that gives all blockchain-related projects the right to open a local bank account.
The new regulatory framework, drafted by the Autorite des Marches Financiers (AMF) seeks to provide certainty and remove a longstanding bone of contention between startups and banks.
Under the new rules, any blockchain or crypto related business is granted the right to have a bank account in the country. This right hinges on their willingness to adhere to other regulations under the wide-ranging blockchain bill which was adopted in the French National Assembly on 11 April.
A part of the PACTE Law, the government has created a new legal environment which encourages growth within the sector. It also offers those launching ICOs or providing digital asset services, the right to hold a “visa” to operate within the country.
Partner at Parisian law firm, Simmons and Simmons, Emilien Bernard-Alzias told CoinDesk that French parliament have been looking for a way to make France more appealing to crypto-entrepreneurs.
“Before PACTE law this was a struggle for crypto-related businesses to open a bank account with a French bank. But now French banks which refuse to open an account will have to explain their refusal before the French regulators and we can bet they would avoid having this discussion with the French regulators.”
Whilst a number of jurisdictions have begun to roll out new crypto-friendly legislation, many operators are struggling when it comes to opening bank accounts. In Malta, the so called “blockchain island” the government introduced three new crypto Acts in 2018 in a bid to cement their place as a leading blockchain jurisdiction. The problem is however that many of them have been unable to open bank accounts within the country, leaving them stuck without a local banking option.
It is a similar story in the US where regulators constant warnings against risks have dissuaded many banks from providing services to business operating in the digital currency sphere.
According to Domitille Dessertine, a Fintech leader at the AMF, feedback from big players in the industry was a big driver behind the approach of the French authorities. He added that the government would be very supportive of the right and entitlement to open a bank account as long as the entity abides by all regulatory requirements.
Banks that refuse to offer banking services, will now have to justify their decision not just to the business, but to the government as well.
“The relationship between the project and the bank remains contractual, but if the banks refuse then they will need to justify with us why they have refused to open a bank account,” said Dessertine.
This latest news in conjunction with the broader regulatory changes are set to present France as a jurisdiction of choice for blockchain and crypto startups looking for an EU headquarters.