France has emerged as one of Europe’s most proactive jurisdictions in shaping a comprehensive legal and regulatory framework for cryptocurrencies and blockchain-based innovations. From early financial intelligence monitoring to pioneering tokenized securities and central bank digital currency (CBDC) experiments, France has balanced innovation with investor protection and financial stability.
This article explores the evolution of cryptocurrency regulation in France, covering key legislative milestones, regulatory agencies, taxation policies, and market developments—all while highlighting how businesses and investors can navigate this dynamic environment.
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Early Regulatory Awareness and Financial Oversight
France's journey into cryptocurrency regulation began not with enthusiasm for innovation, but with concern over financial crime. In its 2011 annual report, Tracfin, France’s financial intelligence unit responsible for combating money laundering and terrorist financing, made its first reference to Bitcoin. This marked the initial recognition of digital assets as a potential risk vector within the country’s financial system.
As global interest in blockchain grew, so did scrutiny from French regulators. The Prudential Supervision and Resolution Authority (ACPR), part of the Banque de France, published a report in 2014 highlighting the risks associated with virtual currencies. A significant regulatory step came in January 2014 when ACPR stated that any entity receiving fiat currency on behalf of clients for the purchase or sale of cryptocurrencies must obtain a payment services license in France.
By December 2016, anti-money laundering (AML) legislation was updated to include mechanisms regulating cryptocurrency platforms and brokers. This laid the foundation for a formal compliance regime requiring crypto service providers to implement robust customer identification procedures—commonly known as Know Your Customer (KYC) protocols.
During this period, France also embraced blockchain innovation. Several French banks joined the R3 consortium, which developed Corda, a private blockchain platform. Additionally, the Caisse des Dépôts et Consignations, a public financial institution, launched LaBChain, a blockchain innovation lab focused on digital identity management and streamlining KYC processes through distributed ledger technology.
Legal Framework for Crypto Intermediaries and ICOs
The year 2017 marked a turning point for cryptocurrency activity in France. Initial Coin Offerings (ICOs) gained momentum, prompting both government and regulators to respond. Three parliamentary working groups were established to study ICOs, blockchain, and digital assets. Concurrently, the French Financial Markets Authority (AMF) and ACPR formed internal innovation units to supervise fintech developments.
In October 2017, the AMF released a consultation paper on ICOs. After extensive stakeholder engagement, it was decided that ICOs would not be forced into existing securities laws but would instead receive a tailored regulatory framework. This approach aimed to foster innovation while ensuring transparency and investor safeguards.
This framework was codified in the 2019 PACTE Act (Plan d’Action pour la Croissance et la Transformation des Entreprises), a landmark law designed to support small and medium-sized enterprises (SMEs) and modernize corporate governance. The PACTE Act introduced specific rules for crypto asset service providers (CASPs) operating in France, including licensing requirements, capital adequacy standards, and disclosure obligations.
Importantly, the law clarified that tokens issued through an ICO in France cannot qualify as securities—ensuring a clear distinction between utility tokens and regulated financial instruments.
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Taxation of Cryptocurrency Gains
Alongside regulatory clarity, France introduced a dedicated tax regime for digital assets. The 2019 Finance Act established a flat tax rate of 30% on capital gains from cryptocurrency transactions, combining income tax and social contributions. This simplified structure applies to individuals and avoids progressive taxation, making it relatively favorable compared to other European countries.
Notably, frequent traders may be reclassified as professional investors, subjecting them to different accounting and tax treatment. However, the 30% flat rate remains a cornerstone of France’s approach to taxing crypto investments.
Security Tokenization and Tokenized Securities
Blockchain’s potential to transform traditional finance became evident with the rise of security tokenization—the process of representing ownership of real-world assets (like stocks or bonds) as digital tokens on a blockchain.
France formally recognized blockchain technology in law via Ordinance No. 2016-520, enacted on April 28, 2016. It created a legal framework allowing SMEs to raise funds through crowdfunding platforms by issuing negotiable instruments ("mini-bonds"), which could be recorded either traditionally or via a distributed ledger system.
A major advancement came with Decree No. 2017-1674 on December 8, 2017, which extended the use of distributed ledgers to the issuance, registration, and transfer of over-the-counter (OTC) securities. These digital representations are more accurately called tokenized securities rather than "security tokens."
The decree specifies four key technical requirements for distributed ledgers used in securities registration:
- Ensuring data integrity in design and implementation
- Enabling direct or indirect identification of security holders and their holdings
- Including business continuity plans with external data backup systems
- Allowing registered holders to access their transaction history
Additionally, new rules were introduced regarding the pledge of securities held on distributed ledgers.
Real-world applications followed quickly. In April 2019, Société Générale issued a €100 million covered bond tokenized on the Ethereum blockchain as part of a pilot program. The bank acted as sole subscriber, demonstrating institutional confidence in blockchain-based issuance.
In March 2020, the AMF published an analysis identifying legal barriers to launching Security Token Offerings (STOs) in France. It recommended that the European Commission establish a “digital lab” allowing regulatory sandboxes where certain rules could be relaxed to facilitate STO settlements.
Asset Management and Crypto Investment Funds
The past few years have seen growing institutional interest in cryptocurrency investment vehicles. In November 2017, Tobam launched what it claimed was Europe’s first Bitcoin-dedicated fund. However, due to the absence of a clear regulatory category for digital assets at the time, the fund did not receive AMF approval.
A breakthrough occurred in 2018 when Napoleon X raised €10 million through an ICO and became the first crypto startup in France to obtain an AMF-authorized asset management license.
Under the PACTE Act, two types of alternative investment funds can now legally hold digital assets:
- Professional Fund for Participating Companies (FPCI): May allocate up to 20% of its portfolio to digital assets
- Specialized Investment Fund (FPS): Can fully invest in assets recorded on distributed ledgers
Both structures are classified as alternative investment funds and must be managed by licensed asset managers with appointed custodians responsible for safeguarding fund assets.
The AMF has also taken steps to protect retail investors from speculative crypto derivative products like CFDs and binary options. In February 2018, it clarified that cash-settled crypto contracts are considered derivatives under French law. Platforms offering such products must be authorized and are prohibited from marketing directly to the French public.
Custom crypto portfolio management for clients is now included in the list of regulated digital asset services.
Banking, Stablecoins, and Central Bank Digital Currency
While French payment regulations—aligned with the EU’s Payment Services Directive 2 (PSD2)—focus on fiat currency, the rise of stablecoins has blurred the line between traditional and digital finance.
The European Banking Authority (EBA) has stated that fiat-backed redeemable stablecoins may qualify as electronic money if they meet specific criteria:
- Stored electronically
- Represent monetary value
- Constitute a claim on the issuer
- Issued upon receipt of funds
- Intended for payment purposes
- Accepted by parties other than the issuer
Consequently, some stablecoin issuers may need to obtain an e-money license to operate legally in France.
France has been particularly cautious about global stablecoin projects. When Facebook announced its Libra (later Diem) project, French officials expressed strong reservations. The Minister of Economy and Finance emphasized that while private companies can create payment systems, they cannot issue sovereign currency.
The Governor of Banque de France stated that launching Libra would require either a payment services license or a banking license. France also led efforts within the G7 to form a working group on stablecoins.
More recently, Banque de France has initiated pilot programs for a Central Bank Digital Currency (CBDC), focusing on wholesale use cases such as interbank settlements and clearing using tokenized financial assets—signaling long-term strategic interest in digitalizing national monetary infrastructure.
Frequently Asked Questions (FAQ)
Q: Do I need a license to operate a cryptocurrency business in France?
A: Yes. Crypto asset service providers (CASPs) must register with the AMF under the PACTE Act to offer custody, exchange, or advisory services related to digital assets.
Q: Are cryptocurrency gains taxed in France?
A: Yes. Capital gains from crypto transactions are subject to a flat tax rate of 30%, including social charges. Losses can offset gains within the same year.
Q: Can French funds invest in Bitcoin?
A: Yes. Professional funds like FPCIs can allocate up to 20% of assets to digital currencies. Specialized funds (FPS) can invest entirely in blockchain-based assets if managed by licensed firms.
Q: Is DeFi regulated in France?
A: While Decentralized Finance (DeFi) remains largely unregulated today, any entity providing services that resemble CASP activities may fall under AMF oversight depending on its function and structure.
Q: What is France’s stance on stablecoins?
A: Fiat-backed stablecoins may be treated as electronic money and require licensing. Unregulated stablecoins face increasing scrutiny due to financial stability concerns.
Q: Is France developing its own digital currency?
A: Yes. Banque de France is actively testing a wholesale CBDC for interbank settlements and tokenized asset transactions.
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Conclusion
France has positioned itself as a leader in balancing innovation with regulation in the digital asset space. Through progressive legislation like the PACTE Act, clear tax guidelines, support for tokenized securities, and active CBDC research, it offers a stable yet forward-looking environment for fintech entrepreneurs and institutional investors alike.
However, compliance remains essential. With evolving AML/CFT requirements and expanding regulatory scope—including potential MiCA alignment post-2025—companies must stay informed and agile.
For startups aiming to launch crowdfunding platforms or crypto-native financial services in France, understanding this regulatory landscape is not just advisable—it’s imperative for sustainable growth.