FRANCE Law and Practice Contributed by: Clara Hainsdorf, Bertrand Liard, Saam Golshani and Guillaume Vitrich, White & Case LLP
innovation and enabling new business models within the TMT sector. The main legal challenges posed by cryptocur - rency are smart contracts, which are self-exe - cuting contracts with terms written into code and stored on a blockchain. Their code-based structure complicates the interpretation of terms, potentially leading to unintended outcomes. Programming errors pose serious security and financial risks due to the irreversible nature of blockchain transactions. Blockchain and crypto-assets are regulated under EU laws, which are technologically neu - tral and refer to Distributed Ledger Technology (DLT). These rules apply to both DLT market infrastructures and crypto-assets. DLT-based market infrastructure is governed by the general framework, which includes Direc - tive 2014/65/EU (MiFID II) for multilateral trading facilities and Regulation No 909/2014 (CSDR) for central securities depositories. To promote DLT adoption, Regulation (EU) 2022/858 introduced the Pilot Regime, offering regulatory exemptions. This applies to DLT multilateral trading facilities (DLT MTFs), DLT settlement systems (DLT SSs) and combined DLT trading and settlement sys - tems (DLT TSSs). Alongside the general requirements, the Pilot Regime enforces transparency and cybersecu - rity requirements, such as publishing business plans, defining operational rules and implement - ing risk management procedures. It also allows DLT SSs and DLT TSSs to settle transactions in DLT-issued currency without using securities accounts or central bank money. Since 2017, France’s Ordinance No 2017-1674 has enabled the use of shared electronic regis -
tration systems (DEEP) for financial securities, granting them the same legal effect as traditional account registration. Since 30 December 2024, crypto-assets in the EU have been governed by Regulation 2023/1114 (MiCA), which standardises rules for crypto-asset issuers to enhance consumer protection and financial stability. MiCA defines crypto-assets as digital representations of value or rights that can be transferred and stored using DLT. MiCA identifies three categories of crypto- assets, as follows: • e-money tokens (EMTs) are crypto-assets whose value is pegged to a single official cur - rency; • asset-referenced tokens (ARTs) are linked to other assets or rights; and • all other crypto-assets fall into a separate category. Issuers are required to publish a white paper, and only credit institutions or electronic money institutions are permitted to issue EMTs. Issuers of significant EMTs and ARTs must also comply with additional obligations related to liquidity and remuneration policies. NFTs, however, are explicitly excluded from MiCA’s scope. Since the regulation took effect, only authorised crypto-asset service providers are allowed to operate, subject to strict governance and trans - parency requirements. Existing providers may continue operating under national laws until July 2026 or until they receive MiCA authorisation.
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