Two years after the PACTE law, the PSANs are still in difficulty with the banks

The results of the PACTE law two years later

The PACTE law was promulgated on May 22, 2019. A catch-all law, legislating in many areas, it created new provisions relating to digital assets. It follows the 2018 finance law, which instituted article 150 VH bis of the general tax code (CGI) and the new tax regime applicable to capital gains.

Among its flagship measures, it defines what a digital asset is and distinguishes it from the “digital token”. The PACTE law also introduces the new status of digital asset service provider (PSAN) and devotes a large part to fundraising in cryptocurrencies (Initial Coin Offerings, ICO).

Two years later, the PACTE law monitoring and steering committee published its second report on its application. If crypto-assets are rarely mentioned in the 244 pages, they nevertheless draw conclusions that confirm the extreme reluctance of French banks on the subject.

To read – Access of PSANs to bank accounts, an endless obstacle course?

A finding of the lack of interest in ICOs

Created by the PACTE law, the optional visa of the Financial Markets Authority (AMF) aims to fight against fraudulent ICOs. Indeed, in 2018, the number of scams was objectively very important and tarnished the image of this specific fundraiser.

The monitoring committee nevertheless noted the relative failure of the visa. Only three ICO visas have been issued and a fourth is under study. In two years, that has been little. In addition, no PSAN has been granted a visa, but the report does not specify whether a PSAN has requested one.

However, it is not all about the visa. On the one hand, it remains optional and is seen as a guarantee of seriousness for investors. On the other hand, more importantly, after the year 2018, the number of ICOs has sharply decreased in the world.

On the specific provisions of the PACTE law on ICOs, the report concludes that the legal framework has “probably not had a decisive effect on the development or slowdown of this market”. We can only agree with this observation.

Confirmation of the difficulties encountered by the PSANs

Brief review of PSAN status and obligation to obtain

The most interesting part is that relating to PSANs and more particularly to their difficulties encountered in accessing bank accounts. This sad observation has been known for a long time and the Fintech ACPR-AMF forum rightly recalled it last May.

As a reminder, the banking sector had refused to co-sign the conclusions, despite the presence of the AMF and the Prudential Control and Resolution Authority (ACPR), the banks’ policeman.

After a brief review of the conditions for obtaining PSAN status, the number of registrations (22, in fact 23 since the Caisse des Dépôts et Consignations recently obtained its own) and approvals (0, two currently at the study), the report gets to the heart of the matter.

First of all, he recalls the obligation to obtain the PSAN for any platform aimed “explicitly at the French public” and returns to the Crypto.com affair, placed on the blacklist.

Implicitly, we can thus affirm that, without explicitly targeting the French public, the PSAN is not an obligation. This is the reason why the Kraken, Coinbase or Binance platforms are not worried.

The delicate question of the right to a bank account for registered PSANs

The report recalls that the PACTE law established a right to an account, allowing PSANs to appeal to the ACPR in the event of refusal to open a bank account. Despite this favorable disposition, the finding is clear and shivers down your spine:

There are still difficulties encountered by PSANs in obtaining or maintaining a bank domiciliation in France, obtaining financing or using certain payment systems. As part of the risk policy and their commercial policy, some credit institutions rule out any business relationship with entities operating in the crypto-asset sector.

A year ago, the Association for the development of digital assets (Adan) could not say better. However, a year later and despite the conclusions of the Fintech ACPR-AMF forum, nothing seems to be going in the right direction.

Above all, this reluctance would not come only from traditional banks, but also from neo-banks, which are nevertheless considered to be more open.

The report recalls the edifying results of a survey carried out by Adan in 2020: 82% of respondents were refused the opening of a bank account or were forced to close.

However, the authors believe that it is too early to draw definitive conclusions on this point. We disagree on this point, because the PSAN registration precisely means that the AMF and the ACPR have validated the seriousness of the company in question.

This discrimination in access to bank accounts should then no longer be relevant for PSANs.

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About the author: Benjamin Allouch

Formerly a lawyer specializing in personal data and digital law, I quickly became interested in Bitcoin, blockchain technology and their legal implications. Today, I am an independent consultant and writer in the field of cryptocurrencies and blockchain.
All articles by Benjamin Allouch.

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