A new law has been passed in France to permit insurance companies to allocate funds in cryptocurrency without any limits on the amount they want to invest in crypto.
According to a French local newspaper, “The Pacte” law (Plan d’action pour la croissance et la transformation des entreprises, The action plan for the growth and transformation of enterprises) was embraced the last Thursday by the French National Assembly (the second chamber of parliament).
The law reads that insurance companies can invest in crypto via (Fonds Professionnel de Capital Investissement, Professional Capital Investment Funds).
As indicated by Les Échos, one of France’s largest finance newspaper, “the Pacte” law passed last week in the National Assembly House, enables insurance companies in France to provide insurance policies exposed to crypto assets. Cryptocurrency is a popular product in France and it is getting a lot of attention especially during the Paris protests.
“This was not the primary objective of the Pact, but insurers will be able to offer products based on crypto assets. They will be able to do so through specialized funds,” Joël Giraud, member of the National Assembly and member of La République En Marche party.
The new law will be operative after the publication of the implementation guidelines, they state.
The framework was made possible by 2 articles in the Pache law:
Article 21 of the Pacte law changed the Insurance Code to permit professional investment funds (FPSs) to be placed in life insurance.
Article 26 b of the Pacte law changed the arrangements of the Monetary and Financial Code identifying by assets the qualified for investment by FPSs
It seems clear from the new amendments that FPSs can invest in cryptocurrencies. Also, other institutional investors like private funds may allocate fund in cryptocurrency according to the new law.
Which means this law is far more extensive than just insurers but applies in general to institutional investors including pension funds.
What this essentially means is that France has removed any limit for investments in crypto. In the US the law does not allow for funds under management to invest more than 10% in securities.
France is one of the biggest economies in the world and one of the leading designers of the European Union. Now France becomes the first important country that passes a law in favor of cryptocurrencies that will expose crypto assets to a large market and help the massive crypto adoption.