France: Crypto-Friendly Hub in the EU

Overview of France’s Cryptocurrency Regulation

France is one of the most crypto-friendly countries in the world, its government has taken a supportive approach and the country has a well-developed regulatory framework for the industry.

In 2019, the French government passed the PACTE law, which defined cryptocurrencies as “digital representations of value that are not issued by a central bank or public authority and are not necessarily linked to a fiat currency.” The law also established a regulatory framework for cryptocurrency service providers (CSPs), which are businesses that offer services related to cryptocurrencies, such as exchanges and wallets.

CSPs in France are required to register with the Autorité des marchés financiers (AMF), the French financial regulator. CSPs are also subject to a number of other requirements, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.

In 2022, the French government announced plans to create a “crypto valley” in Paris and is also working on developing a central bank digital currency (CBDC).

The future of cryptocurrency regulation in France, however, is likely to be shaped by the development of the European Union’s (EU) regulation. The EU is currently working on a new regulatory framework, MiCA (Markets in Crypto Assets), which is expected to be approved by the European Parliament and the Council of the European Union in 2024.

Below are some updated statistics on the cryptocurrency industry in France:

Source: tripleA

The following are some of the crypto companies that have moved to France in recent years:

• Binance
• Ledger
• Sorare
• Coinhouse
• CoinMarketCap
• Bitpanda
• Kraken
• eToro
• Coinbase
• Gemini

Companies, providing jobs and services to the French economy, will likely contribute significantly to the country’s GDP in coming years and as adoption continues to rise in today’s world, businesses would benefit greatly by incorporating cryptocurrency payments into their payment systems. In fact, a triple A survey of French business owners found that 78% agreed that businesses would benefit from the adoption of cryptocurrency payments.

Source: tripleA

Opening Up a Crypto Asset Business in France

Success rate of obtaining a license:

Based on the following factors, experts estimated probability of success in obtaining a cryptocurrency licence in France is around 70%:

The French government has taken a supportive approach to cryptocurrencies, and the country has a well-developed regulatory framework for the industry.

The French financial regulator, the Autorité des marchés financiers (AMF), has published a number of guidelines for cryptocurrency businesses. These guidelines provide clear guidance on the requirements for obtaining a cryptocurrency licence.

There are a number of experienced lawyers and consultants who can provide professional advice on cryptocurrency regulation.

However, it is important to note that there is no guarantee of success. Businesses should carefully consider the requirements for obtaining a licence and should make sure that they have a strong application before submitting it.

Here are some additional factors that could affect the probability of success:

The experience of the applicant > Businesses with more experience in the cryptocurrency industry are more likely to be successful in obtaining a licence.

The quality of the application > Businesses with a strong application that includes all of the required information are more likely to be successful.

The current state of the cryptocurrency industry > The cryptocurrency industry is constantly evolving, and the requirements for obtaining a licence may change over time. Businesses should keep an eye on the latest developments in the industry and make sure that they are prepared for any changes.

Taxation:

Cryptocurrencies are taxed in France in the same way as other assets, such as stocks and bonds. Capital gains from the sale of cryptocurrencies are subject to a flat tax of 30%. Cryptocurrencies are also subject to value-added tax (VAT) at the rate of 20%.

Costs:

The approximate overall cost of obtaining a cryptocurrency licence in France varies depending on a number of factors, including the type of licence you are applying for, the size of your business, and the complexity of your application. However, you can expect to pay between €5,000 and €10,000 for the application process.

Here are some of the costs that you will need to factor in when applying for a cryptocurrency licence in France:

• Application fees: The AMF charges a fee of €500 for the application process.

• Legal fees: You will need to hire a lawyer to help you with the application process. The cost of legal fees will vary depending on the size of your business and the complexity of your application.

• Accounting fees: You will need to hire an accountant to help you prepare your financial statements. The cost of accounting fees will vary depending on the size of your business.

• Regulatory fees: The AMF may charge additional fees for regulatory compliance. The cost of these fees will vary depending on the type of licence you are applying for.

In addition to these costs, you will also need to factor in the cost of setting up and running your cryptocurrency business. This includes costs such as:

The total cost of obtaining a cryptocurrency licence in France can be significant. However, the benefits of being licensed can also be significant. A licence can give you peace of mind knowing that you are operating in compliance with the law. It can also give you access to new markets and customers.

If you are considering applying for a cryptocurrency licence in France, it is important to carefully consider the costs and benefits involved. You should also make sure that you have a strong application that includes all of the required information.

Timeframe:

The time it takes to establish a crypto asset business/obtain a license in France varies depending on several factors, including the type of business you are setting up, the size of your business, and the complexity of your application. However, you can expect the process to take between 6 and 12 months.

Here are some of the steps involved in establishing a crypto asset business/obtaining a license in France:

Choose a business structure > You will need to choose a business structure for your crypto asset business. The most common business structures for crypto asset businesses are sole proprietorships, partnerships, and limited liability companies.

Register your business > You will need to register your business with the French government. The registration process varies depending on the type of business you are setting up.

Obtain a license > If you are planning to offer certain services, such as trading or exchanging cryptocurrencies, you will need to obtain a license from the AMF. The licensing process is complex and time-consuming.

Comply with regulations > Once you have established your business and obtained a license, you will need to comply with a number of regulations, including AML and KYC regulations.

The process of establishing a crypto asset business/obtaining a license in France can be complex and time-consuming. However, it is important to make sure that you comply with all of the relevant regulations. By doing so, you can help to protect your business and your customers.

Here are some additional tips for establishing a crypto asset business/obtaining a license in France:

Get professional advice from a lawyer or consultant who is experienced in cryptocurrency regulation.

Be patient and persistent. The process of establishing a crypto asset business/obtaining a license can take several months.

Future Outlook

France is becoming a major hub for cryptocurrency companies due to tax incentives, a robust legal and regulatory system, and an estimated €1 billion in crypto revenue generation in 2023. Experts predict that the influx of companies into the country will have a major impact on its GDP in the years ahead by creating a wealth of new job opportunities and essential services.