A newly passed act in France allows life insurance providers to invest in crypto-currencies and tokens without any limitation on the amount that can be allocated.

The Pacte law (Plan d’action pour la croissance et la transformation des entreprises, Action plan for the growth and transformation of enterprises) was adopted this Thursday by French lawmakers according to a local paper.

Based on a rough translation, they say a dual provision of the act allows insurers to invest, via specialized professional funds, in crypto-assets. FPCIs (Fonds Professionnel de Capital Investissement, Professional Capital Investment Funds) are also affected by the measure.

According to information gained by Les Échos, one of France’s biggest financial paper, the Pacte law passed this Thursday in the National Assembly allows insurers to offer life insurance policies exposed to crypto-monies. A first for a product so popular in France, they say.

“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 specialised funds,” says Joel Giraud, deputy and budget manager of Emmanuel Macron’s party La République En Marche.

The new framework will be operational after the publication of the implementing decrees, they say.

The system was made possible by the adoption of two texts of the Pacte law, which has been under discussion for 18 months. Article 21 of the Pacte law amended the Insurance Code to allow specialized professional funds (FPSs) to be placed in life insurance account units.

If the article includes conditions regarding the investor’s financial situation or experience, which will be specified by decree, there is no longer any limit on the assets in which FPSs eligible for life insurance can invest. “The FPS has been further relaxed,” explains Emilien Bernard-Alzias, a lawyer at Simmons & Simmons LLP.

At the same time, Article 26 b of the Agreement amended the provisions of the Monetary and Financial Code relating to assets eligible for investment by FPSs. From now on, any “property” subject to “registration in a shared electronic recording device,” in other words a blockchain, will be able to constitute the assets of an FPS.

“With these two provisions, it is written in black and white that FPSs can invest in cryptos like bitcoin,” says Emilien Bernard-Alzias. Private equity investment funds (FPCI) are also affected by the measure.

Meaning this is far broader than just life insurance companies and probably applies to institutional investors in general, including pension funds.

It appears France has basically removed a restriction – also found in US law and elsewhere – that only circa 10% of funds under management can be invested in non-securities.

Meaning there’s now far greater regulatory clarity in one of the world’s biggest economy and in one of the leading architects of the European Union.

France has now become the first country of relevance to pass a crypto specific law that is generally seen as very favorable to this space, including a guaranteed bank account if a crypto project is granted an optional license by their financial regulator, AMF.

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