As France braces for the April 24 presidential election in a runoff, political pundits around the globe are making their bets. The choice is between the centrist incumbent Emmanuel Macron and right-wing populist Marine Le Pen. Much of the political debate this time revolves around economics, but there is one indispensable part of it that is largely absent from the candidates’ electoral agendas: digital assets. While both have a record of public statements on matters related to crypto, neither Macron nor Le Pen seems to be likely to trigger any significant policy change with regard to the French digital economy. 

State of the art

Despite the current administration’s notable efforts to embrace the IT industry, France is still, in many ways, not a particularly tech-friendly country. For years, its authorities have been fighting in the avant-garde of the European regulatory cause against United States tech behemoths’ tax “optimization” practices, such as opening European offices in more relaxed jurisdictions such as Ireland and Luxembourg.

In the way of regulation, the country does not have a specific regime for crypto, but the general regulatory climate is rather harsh. The main legislation regulating the industry is the 2019 Action Plan for Business Growth and Transformation of enterprises, or PACTE. It obliges any crypto firms in France (legally defined as digital asset service providers) to register with the Financial Markets Authority (AMF) and to comply with the Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) requirements set out by the European Union’s Fifth Anti-Money Laundering Directive.

Perhaps the biggest headache for the crypto industry is the strict Know Your Customer (KYC) policy, which sets no transaction value threshold for invoking reporting rules. In other words, every crypto transaction worth 1 euro or more requires a full KYC procedure, including the disclosure of the parties’ full names, addresses and contact details.

On the bright side, disciplined industry players have a chance at obtaining a special license from the AMF, allowing them to apply for French bank accounts. As Thibault Verbiest, a Paris-based partner at the law firm Metalaw, explained to Cointelegraph, French banks are reluctant to open bank accounts for crypto companies.

Meanwhile, the central bank of France is actively exploring a potential central bank digital currency (CBDC).

French regulatory activism

French officials play an active role in the international regulatory process. In February 2021, Robert Ophèle, chairman of the AMF, proposed consolidating all the power and responsibility for crypto regulation in the hands of the European Securities and Markets Authority. He also emphasized the crucial role of blockchain technology in the future of the European economy. The proposition was later repeated by the French government.

Four months later, in June 2021, Bank of France governor François Villeroy de Galhau doubled down on the call to create a pan-European crypto regulatory framework as soon as possible. In contrast to Ophèle, de Galhau’s perspective on the matter sounded far less friendly.

Stressing the threat of crypto eroding “monetary sovereignty,” he estimated that Europe had only one or two years to solve the problem. The EU regulators responded with some major initiatives, such as stepping up work on the Market in Crypto-Assets regulatory framework and the current Transfer of Funds Regulation’s revision with tighter scrutiny of individuals’ transactions.

Nevertheless, the French government has made efforts to support the crypto industry domestically. “France has put itself at the forefront of crypto innovation, at least in terms of the adoption of the regulatory framework and some partnerships with major actors of the industry and the support via the financing of new projects,” Verbiest observed.

In November 2021, standing alongside Cédric O, the French secretary of state for the digital economy, Binance CEO Changpeng “CZ” Zhao announced a partnership with the local financial technology association France FinTech, pledging to spend $115 million on the development of the European crypto industry.

Cautious balancing vs. disinterested suspicion

According to a recent study, 4% of French adults consider cryptocurrencies a topic that will determine their vote in the presidential election. This modest number is reflected in the amount of attention both candidates have been giving to crypto.

A former banker himself, Macron has taken a cautious stance by largely repeating calls for more regulation. At the Davos International Forum in 2018, he called Bitcoin (BTC) and digital currencies “the most aggressive players on the financial markets […] who can create financial crises and deregulate systems,” alongside shadow banking.

As Verbiest reminded, Macron was trained to be a high-ranking official of France’s treasury department. Thus, it’s only natural for him to prioritize the European banking sector’s anxieties over the interests of the digital economy:

“Crypto disrupts banking, and France has a very powerful banking sector. In addition, the European Union and the euro require that France find a consensus with the other European member states on monetary and financial questions.”

Nevertheless, Macron’s first term brought into the halls of power at least two notable individuals who openly support the crypto industry. Back in 2019, O promised “all crypto-asset and blockchain actors” support by setting up “comprehensive and credible conditions” for growth. Several years later, though, O justified the tightening of AML/CFT and dismissed crypto entrepreneurs’ reservations about the policy, saying that he didn’t believe that France was “missing the train of blockchain technology.”

Pierre Person, a 33-year-old member of the French Parliament, was one of the co-founders of the youth organization, Les Jeunes avec Macron, as well as the “left-wing liberal” think tank in support of Macron’s policies, La Gauche Libre. In 2019, he presented a business-friendly report on blockchain to the French legislators and has been advocating for the creation of the European stablecoin ever since.

More recently, however, Person stepped down from the leadership position in Macron’s La République En Marche movement and shared his disenchantment with the government’s actions on crypto.

Macron’s contender, the leader of the familial nationalist party National Rally, Le Pen, always preferred to talk about immigration threats rather than the digital economy. However, she has her own record of a U-turn toward crypto in public speeches.

In 2016, ahead of the previous election, she called for Bitcoin’s ban, presenting it (and the digital currencies in general) as an idea originating from the “powerful Wall Street business lobby.” Since then, Le Pen has toned down the Wall Street narrative, limiting herself to support of strict regulation of crypto assets. In contrast to Macron’s entourage, she or her confederates are yet to say a good word about either cryptocurrency or blockchain technology more generally.

No to self-regulated sector, yes to pan-European approach

Irrespective of the outcome of Sunday’s vote, France will likely stay in line with the pan-European regulatory process that the country itself has been contributing to for years. Speaking to Cointelegraph, Stephen Stonberg, CEO of crypto exchange Bittrex Global, commented:

“It is unlikely that France would have any major issues with the EU’s upcoming Markets in Crypto-Assets [MiCA] regulation, as French regulators will be aware that a pan-European approach will be necessary to adequately oversee the industry. In fact, it’s more likely that French regulators are waiting for MiCA before making any major moves or commitments.”

Should Macron prevail, his administration will likely stay on its current course — a combination of cautiously crypto-friendly (with an emphasis on blockchains, not currencies) rhetoric and strict but not prohibitive policy toward digital assets, in full accordance with the FATF and EU frameworks.

A great summary of Macron’s ambiguous relationship with crypto is his interview, given several days before the second round of the election. Responding to questions on digital assets and Web3, the incumbent managed to elude pronouncing the word “crypto” once while uttering familiar phrases about his country’s mission to become the leader in the digital economy and support innovations. Perhaps, the most important words are:

“I don’t believe in a self-regulated financial sector. This would be neither sustainable nor democratic. It is up to the public authorities to define the right conditions to allow the sector to develop in confidence while encouraging innovation.”

With Le Pen, there is always a chance of a distinct anti-EU stance, but it’s hardly good news for the crypto industry. The candidate, who mixes bits of left and right sentiments in her populist cocktail, hasn’t given any signs that she could be particularly interested in the digital economy.