New Act allows $2 Trillion French Insurance Market to invest in Cryptocurrencies
The French government has recently passed a new act that would allow insurers to invest in Cryptocurrencies like Bitcoin.
The National Assembly of France passed what is known as the Pacte Law “Plan d’action pour la croissance et la transformation des entreprises, Action plan for the growth and transformation of enterprises” on April 11th with 147 in favor and 50 against, according to the local news outlet Les Echos.
According to Les Echos, a dual provision of the new bill allows insurers to invest in Crypto assets (without any limitations) via specialized funds. Joel Giraud, member of the National Assembly of France said that allowing Crypto assets was not the primary goal of the act but allows insurers to place Crypto asset products via specialized funds, he confirmed:
“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,
This provision was made possible by two texts of the Pacte Act, Article 21 was amended to allow the placement of specialized professional funds (SPF) “in life insurance units of account.” The SPFs will be able to invest in any number of assets without any limitation.
Article 26 bis of the Covenant amended the provisions of the Monetary and Financial Code relating to assets eligible for investment by SPFs. Henceforth, any “good” subject to a “registration in a shared electronic recording device”, ie a blockchain, can compose the assets of an FPS, reports Les Echos.
Emilien Bernard-Alzias, a lawyer at Simmons & Simmons LLP said:
“With these two provisions, it is written in black and white that FPS can invest in crypto-active like bitcoin,”
Cryptocurrencies are slowly making their way into the traditional financial world, with infrastructure built by Fidelity and Bakkt and tech companies like Facebook actively working on Crypto products, it is setting up for mainstream adoption.
Regulatory clarity is very important to permeate into the traditional financial world like the $2 Trillion insurance market, the new act seems favorable for Crypto adoption.
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