PARIS, France — Officials in France boast of the regulatory certainty that they can provide, while U.S. enforcers wage an intense – but not entirely successful- war against crypto.

Officials are confident about their country’s readiness for Web3 with a registration system for cryptos in place for many years, the new EU laws also known as MiCA due to come into effect in 2024 and legislators discussing a gaming regime involving non-fungible (NFT) tokens. This was revealed at a conference hosted by lobby group ADAN.

Marie-Anne Barbat-Layani said that MiCA will allow the sector to “go to the next gear” in terms of the regulatory requirements. She added that France’s Financial Markets Authority, the regulator she chairs, was “resolutely opened to innovation.”

Barbat-Layani compared the situation in France with that of America.

She said that “some of our peers have taken legal action, including the U.S. Securities and Exchange Commission [SEC] – a strategy whose success is not entirely clear but which aims to treat crypto like a traditional financial tool.” “It is a different decision than that made in Europe.”

MiCA, passed into law by the US Congress in June, will take full effect on December 20, 2024. It adapts current rules for trading financial instruments. The SEC, however, has taken actions against Binance, Coinbase and other crypto companies, alleging that they were not registered under existing regulations as securities trading platforms and that some tokens listed had to be registered as securities.

Last week, the U.S. strategy may have suffered a setback with a decision that determined Ripple’s XRP token does not necessarily fall under current securities laws.

France has positioned themselves as a crypto hub. Companies such as Binary are registered under the existing crypto law, PACTE. This is administered by AMF. The AMF granted its first crypto license on Tuesday to Forge the financial technology arm of Societe Generale. This was a more rigorous process, but it already brings Forge in line with MiCA.

Binance recently found out that being regulated can have its ups and downsides. The Paris prosecutor raided the company for “aggravated” money laundering. Binance said they were cooperating with the investigators. However, the incident didn’t dampen their enthusiasm for the country.

Binance France Executive Director for Legal Stephanie Cabossioras said at the conference that there was “no reason to leave France” because of this probe. She added that recent events are just part of adjusting to life as a traditionally regulated financial entity. “There are little surprise… but this will be the norm.”

Ledger, one of France’s most successful crypto companies, has a founder who says that while entrepreneurs may be complaining about high taxes, employment restrictions and the lack of venture capital investment, France offers incentives beyond regulatory certainty.

Why is Ledger located in France? Eric Larcheveque (former chief executive officer of Ledger) asked about the chip-based hardware, “Its foundational technology” is the smartcard. It’s a French invention, a technology that has been mastered in France…but not in the U.S.”

France hopes to build on the success of its current regulatory regime by legislating a new system for Web3 games that involve monetizable objects, i.e. tradable goods that give rights within the game whose value increases by playing more. This is known as JONUM in French.

The “text” could be ready by the end the year if lawmakers can agree on a framework.

Isabelle Falque Pierrotin is the chairperson of France’s National Gambling Authority. She told attendees that she prefers legislation which sets high-level goals, like protecting children. This allows her to negotiate with the industry on the details.

In May, French Web3 Company Sorare under regulatory stress announced changes to their NFT soccer game for domestic market – though the ANJ intended these only as a temporary fix pending legislation changes.

Some believe that if these new gambling laws were passed, they could have a significant impact.

Matthieu Luchesi, a fintech and innovation specialist with law firm Gide255 said that “what is being anticipated, the last versions that were discussed in Senate a few week ago, show that there’s a real will to position France as a leader and pioneer on this topic.” He added that the law must be “well calibrated” to make it appealing.

Some of the quotations are translated from French.

Sandali Handagama is the editor.