- Cryptocurrencies get a green light from French lawmakers
- The $2 trillion worth French insurance industry can now invest in crypto
- Sources say the law extends “much beyond” insurance companies
French life insurance companies will now be able to invest in cryptocurrencies and digital tokens without any limit or hard cap, reports Trustnodes, April 12, 2019.
French Insurance Companies Can Now Invest in Crypto
An increasing number of regulatory bodies and governments the world over are slowly but surely giving the nod of approval to cryptocurrencies as a legitimate store of value.
The year 2018 saw U.S. state of Ohio pass a law to accept payment of taxes in bitcoin. Similarly, this year, a small Canadian town in Ontario gave the go-ahead to a pilot that allows individuals and companies to pay property taxes in cryptocurrencies.
Now, in a similar move, the French legislative assembly has passed a law that allows insurance companies to invest in digital currencies without any limit. According to a local newspaper, French lawmakers adopted the Pacte law (Plan d’action pour la croissance et la transformation des entreprises, the Action plan for the growth and transformation of enterprises) on April 11, 2019.
Based on a rough translation of the new christened law, one of its dual provisions allows insurance firms to invest in crypto-assets via specialized professional funds. Notably, FPCIs (Fonds Professionnel de Capital Investissement, Professional Capital Investment Funds) are also affected by the measure.
Much More than Just Insurance Companies
Citing information from Les Échos, one of France’s biggest financial papers, Trustnodes reports that the law allows French insurance companies to offer life insurance policies exposed to cryptocurrency assets.
Joel Giraud, deputy and budget manager of Emmanuel Macron’s party La République En Marche said:
“This was not the primary objective of the Pact, but insurers will be able to offer products based on crypto assets. They will be able to do so through specialised funds.”
The sources added that the new law will be in effect after the publication of the implementing decrees.
Emilien Bernard-Alzias, a lawyer at Simmons & Simmons LLP further explains:
“If the article includes conditions regarding the investor’s financial situation or experience, which will be specified by decree, there is no longer any limit on the assets in which FPSs eligible for life insurance can invest. The FPS has been further relaxed.”
In a nutshell, the passing of the law means that their purview extends far beyond insurance companies to institutional investors as well, including pension funds.
The new law has basically removed the restrictions which are currently imposed on US companies that prohibit them from investing more than 10 percent of funds under management in non-securities.