France: Decree Moves Securities on Blockchain Forward with Legal Structure

On December 24th, the French Government issued a decree (Décret n°2018-1226 du 24 décembre 2018) outlining the utilization of blockchain for securities.

Specifically, for the “use of a shared electronic recording device for the representation and transmission of financial securities and for the issue and sale of minibonds.” (à l’utilisation d’un dispositif d’enregistrement électronique partagé (Deep) pour la représentation et la transmission de titres financiers et pour l’émission et la cession de minibons).

While no mention of blockchain or distributed ledger is included in the decree, the language reflects a previous statement posted by the Minister of the Economy and Finance, Bruno Le Maire, posted in May of 2018.

The May post states, “the purpose of this order is to make the registration of an issue or transfer of financial securities in a blockchain the same as the book-entry of financial securities.”

It appears that France has now officially accommodated the usage of blockchain for the management of securities.

French Attorney Thierry Vallat posted on his personal blog that it was Christmas for blockchain following the decree. Vallet further describes the regulatory details noting that France is the first European country to define the requirements for blockchain based securities as it seeks to lead the world in the technology.

It is not all smooth sailing in the Gallic nation. During December the French National Assembly rejected several crypto friendly amendments to improve the tax treatment of cryptocurrency.

Around the same time, French MP Jean Michel Mis presented a report to the National Assembly with 20 different recommendations for France to become the blockchain nation. The MP also warned not to let blockchain tech become the next “Minitel” – France’s attempt to guide the internet from back in the 80s that was finally discontinued in 2012.

 

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