France’s financial regulator is set to approve a wave of cryptocurrency-related firms in the country, subjecting them to new rules that include paying taxes and complying with capital requirements and consumer protections, according to a report by Reuters.
The rules, which will come into effect later this month, are among the first passed on cryptocurrency by a major world economy. In exchange for abiding by the standards set forth, the companies will receive approval to operate in the country.
“France is a precursor. We will have a legal, tax and regulatory framework,” said Anne Marechal, an executive at the Financial Markets Authority. “We are in talks with three or four candidates for initial coin offerings (ICOs).”
In addition to the ICOs, the regulatory organization is also in touch with custodians, fund managers and crypto exchange companies.
Because digital currency is so new, regulations vary around the world. Some countries, like Belarus and Malta, have laws regarding digital coins, but other more prominent countries simply layer on top of existing rules.
Cryptocurrency has been a popular topic as of late, since Facebook announced the release of its own cryptocurrency, called Libra. The news has sparked new interest in the field, and many cryptocurrencies have bounced up and down in value in the past few weeks.
Many regulators and lawmakers around the world have expressed concerns about the issue and whether crypto will destabilize the financial stability of the current system, or if it will help criminals to launder money.
Many cryptocurrency firms welcome the idea of regulation, because it means they can operate within clear boundaries and rules.
“When you are an entrepreneur, the worst that can happen to you is to set up your business where there is no regulation, to see an adverse regulatory framework later imposed that jeopardizes your whole business,” said Frederic Montagnon, the co-founder of LGO, a New York-based cryptocurrency platform that launched an ICO in France.