France to implement a right to a bank account for crypto-asset issuers and intermediaries

Source : ICO Alert _ KRAMER LEVIN NAFTALIS & FRANKEL LLP _ October,24 2018

After authorizing the registration and transfer of unlisted securities through distributed ledgers[1] and drafting optional regulatory frameworks for token issuances and crypto-asset trading platforms[2], France now aims at ensuring that crypto-assets issuers and intermediaries can seamlessly access basic banking services.

Three amendments to the Draft Law No. 1008 on growth and companies’ transformation (the "Loi PACTE") have been adopted by the national assembly on this matter and would guarantee that crypto-assets issuers and intermediaries will not be arbitrarily forbidden to open bank accounts.

France would, once the Loi PACTE is definitely adopted, be the first jurisdiction to guarantee an access to bank accounts to crypto stakeholders, thus removing one of the main barriers they face when carrying out their business.

The three amendments to the Loi PACTE are articulated as follows:

• Amendment No. 1914 amends article L. 312-23 of the French Monetary and financial code (the "MFC") to provide that credit institutions shall establish objective, non-discriminatory and proportionate rules to determine whether token issuers that have been granted an optional visa by the financial regulator (the Autorité des marches financiers or "AMF") can access deposit and payment accounts, it being provided that their access to those banking services shall be efficient and unencumbered ;
• Amendment No. 2480 extends this right of access to a bank account to crypto-asset intermediaries that have been granted a mandatory or optional (as the case may be) visa by the AMF. It also provides that credit institutions refusing to grant access to a bank account to a crypto-asset issuer or intermediary shall justify such refusal with the AMF and/or the banking authority (the Autorité de contr?le prudentiel et de resolution or "ACPR").
• Amendment No. 1882, as amended by sub-amendment No. 2853, states that an implementing decree will detail these provisions and, notably, provide the legal remedies available in case of refusal by a credit institution. As discussed during the public debate in the national assembly, those remedies will include appeal of the refusal in front of the Banque de France and French courts.

This pragmatic move is expected to reinforce Paris’ attractiveness, as crypto stakeholders often consider access to bank accounts to be the leading impediment for the development of their businesses.

As early as 2014, a crypto-assets trading platform indeed successfully argued in front of the Banque de France that it should benefit from the right to a bank account set forth in article L. 312-1 of the MFC. The Banque de France ruled in favor of the trading platform and ordered the commercial bank to open a bank account in its name. This decision was later confirmed by French courts[3]. Despite this ruling, crypto-assets issuers and intermediaries are still prevented by most credit institutions from opening bank accounts in their books.

These provisions would moreover create a strong incentive for crypto-asset issuers and intermediaries to obtain an optional visa from the AMF instead of deciding to remain unregulated, as the right to access bank accounts will be tied to such visa. The fact that crypto-assets are intangible and thus cross-border by nature make it easier for stakeholders to avoid regulatory framework and practice forum shopping; in this context, France is taking a pragmatic approach to crypto-asset regulations, opting for voluntary compliance rather than "hard law" prohibitions.