After 18 months of discussion, the final vote came on Thursday. It was on this historic day that the French Parliament decided to adopt the Pact Act, a dual provision which allows insurers to use Bitcoin for insurance saving funds.
“This was not the primary goal of Pact, but insurers will actually be able to offer products based on crypto-assets. They will be able to do so through specialized funds,” confirmed LREM MEP and budget rapporteur Joel Giraud.
The new framework, where ensuring parties can now include cryptocurrencies in their claims, will be operational after the publication of the implementing decrees.
Correspondingly, there are two separate Articles within the act:
Article 21, which will allow the placement of specialized professional funds (SPF) in life insurance accounts altering the Insurance Code.
“If the article includes conditions as to the investor’s financial situation or experience, which will be precisely specified by decree, there is no longer any limit on the assets in which the SPFs eligible for life insurance can invest,” said Emilien Bernard-Alzias, a lawyer at Simmons & Simmons LLP.
Furthermore, Article 26 made further amendments to the provisions of the Monetary and Financial Code relating to the digital assets usable for investments by SPFs. The same measure will affect private equity investment funds (FPCI).
“With these two provisions, it is written in black and white that FPS can invest in crypto-active like bitcoin,” added Emilien.
This law could affect a broader spectrum than just life insurance companies and will probably include institutional investors as well.
The French government just removed a restriction in which only around 10% of funds under management can be invested in non-securities, adding more regulatory clarity to the economy.
With this move, France adds a new regulation in favor of the crypto space that sums up to granting bank accounts to projects that are licensed under the Autorité des Marchés Financiers (AMF).