France wants cryptocurrencies to be issued in the country as long as those backing them agree to be regulated, Reuters reported.
If coin issuers sign up to regulation, the French argue they will be seen as more trustworthy by investors, helping the currency gain credibility in the long run. France will even offer certification if the issuer wants. There’s only one small catch: the French state will tax any profits.
“The cryptocurrency community is ready to pay taxes as long as they are not confiscatory,” – said Fabrice Heuvrard, an auditor working with a joint government-industry task force drafting accounting rules for ICOs in France.
It is expected that France will introduce its new rules early next year.
Under France’s regulatory proposals, authorities would verify who is behind a new coin’s issuance, check whether the issuers have a plan to hand back money if the project fails, and force them to abide by “know your customer” (KYC) rules.
The question of tax status is not yet settled, however. The idea would be to consider the amount raised as sales revenue and tax it accordingly. The question of value-added tax – which is 20% in France – has not yet been resolved, a finance ministry official said.
The idea of government certification may be unattractive to some crypto enthusiasts who like secrecy, but there is a demand for regulation from many issuers, said Henry James, deputy CEO of Fincross International.
“A lot of token issuers are struggling against the stigma associated with cryptocurrencies: they are risky and present opportunities for scammers,” – he said.