France Inches Closer to Bitcoin Regulation

The French Senate has released a new report focusing on the type of regulation the government should apply on bitcoin transactions.

Titled ‘Regulation in the face of innovation: public authorities and the development of virtual currencies’, the report follows a meeting of the committee of finance on 23rd July and is based on communication between committee president Philippe Marini and Senate member Francois Marc.

It was inspired by a joint meeting held by the Senate, Treasury, customs, the Banque de France, TracFin (which deals with money laundering issues) and bitcoin specialists in January this year.

As well as looking on the type of regulation France should adopt, the report discusses the regulations used in other countries around the world, and the possible uses of digital currency in the future.

Though clearly stating that bitcoin is – for now – nothing more than a type of virtual bartering tool, the document calls cryptocurrencies a “long-term trend raising important legal and economic matters, that can no longer be disregarded by public authorities”.

It also remains optimistic about the number of opportunities bitcoin may offer. Without ignoring the risks related to its “volatility, its anonymity and its lack of legal guarantee”, it underlines the possible uses of the currency as a “payment system and […] a decentralised validation protocol”.

A measured approach

As mentioned in Minister of Finance Michel Sapin's speech last month, the report shows that France isn't keen on imposing overly strict regulations on bitcoin, instead choosing to remain “halfway between the strictest regulations [from] China, Japan or Russia or the lightest regulations adopted by countries such as the United States, Canada or Israel”.

Acknowledging the relative futility of establishing different national policies, given the nature of the subject, the report proposes a regulatory framework to be established on a European, or hopefully international level.

The report may please French bitcoin enthusiasts willing to see the cryptocurrency gain some popularity, such as co-founder of Bitcoin France and Maison du Bitcoin, Thomas France.

He told CoinDesk that, though the bitcoin scene was only starting to shake up in the country, legal frameworks being put in place by the government would reassure entrepreneurs and companies, and hopefully encourage them to start getting involved.

This isn't the first time the French government has issued regulation on bitcoin. In July, it published a report calling for VAT taxation and greater transparency on all transactions involving digital currencies. There would be a threshold on the margin tax of €5,000, which would leave more room for people to experiment with the currency. The document said:

“We believe that France should let people try, invest and develop business with bitcoin before we tax it.”

Luxembourg Palace image: Dafinka / Shutterstock.com