How France regulates security tokens - read in the blog of the company COREDO

How France regulates security tokens

Updated: 07.09.2020

If you are about to launch a crypto exchange in the EU, this article is perfect for you. Today we will explore the country, that became one of the leaders of “tokenization” in the European Union – France. This leading status in the crypto assets’ regulation is brought particularly by the PACTE law. This law (Law on Business Growth and Transformation) seeks to alleviate the process of growth and transformation for companies. Additionally, its goal is to call corporates’ attention to environmental and social problems.

Our task today is determining the impact the law has on financial businesses in France, especially the security-tokens market that is developing quickly.

Regulation of crypto assets in France

The goal of the new PACTE law is to remove any obstacles on the way of innovation and creativity of the companies. However, there are still some problems to deal with. The challenges arise from the fact that demand for tokens using blockchain technology is continuously increasing in France as well as in Europe in general.

Certain gaps were found in legislation by the French Financial Markets Authority (AMF). These can be problematic while regulating the security tokens in compliance with the new law.

Liberalization of STO

Due to the mentioned trouble, the regulators decided to abandon some requirements and let the market function more freely. The rules of asset management should not slow down the process of product development and the activities of security tokens’ markets in the EU.  The French asset management companies should not have these obstacles while obtaining a license from AMF, either.

Also, the EU plans to found a laboratory that will work on intensifying the development of digital services. Nevertheless, there is one crucial condition that needs to be fulfilled: the rules for the protection of customers’ interests need to develop simultaneously with the obstacles to the STO development being removed.

From now on platforms that provide investment services for STO will be obliged to obtain a financial license in France just as a financial adviser or investment service provider. Yet, it does depend on the type and functions of security tokens.

Furthermore, it is worth taking into account the new cryptocurrency exchange owners that the secondary trading of security tokens in the EU can require licensing which is based on the MiFID II Directive.

It is always crucial for crypto businessmen to watch for innovation in the STO regulatory sphere. Or you can ask the lawyers from COREDO to get it done for you. Being true professionals, they monitor the market thoroughly and always have the latest news about the regulatory framework.


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