The Autorité de contrôle prudentiel et de résolution (ACPR) published some guidelines on DeFi regulatory framework based on a public consultation.
The regulator conducted a series of interviews and assessments with a significant player from the crypto ecosystem to understand the current situation surrounding the defi market.
In April 2023, the ACPR published an initial research paper on the DeFi regulatory framework, which opened the debate for industry regulation.
The discussion focused on an initial analysis of the risks associated with defi and the possible avenues for regulation. The consultation paper allowed the French regulator to consolidate and improve their understanding of the main defi mechanisms.
Some of the key points brought by the consultation paper were to lay down measures relating to the reliability of the blockchain infrastructures on which defi or other tokenized finance may develop. It is set to draw up rules for certification suited to the nature and functioning of smart contracts and to define governance and conduct of business rules to ensure adequate protection of defi customers.
France crypto landscape
In recent years, France has made significant strides in decentralized finance. Defi refers to the use of blockchain technology and smart contracts to create financial applications that are open, transparent, and accessible to anyone with an internet connection.
The French government has shown a positive attitude towards the cryptocurrency industry and has implemented various incentives and regulations to foster its growth.
France has taken steps to attract virtual currency investments. The government eliminated taxes on crypto-crypto transactions, making it more appealing for individuals and businesses to engage in cryptocurrency activities. However, taxation still applies to digital assets converted to fiat currency.