The executive order adopted on December 8 in the Council of Ministers makes Paris the first financial center in Europe to legally allow the transfer of ownership of financial securities by blockchain. This reform will apply to financial securities for which European law does not require a central securities depository, and in particular fund units, negotiable debt securities and unlisted equities and bonds. The order will be supplemented in the first semester of 2018 by implementing measures, which will allow the entry into force of this new scheme.

Blockchain technology is likely to allow a faster, safer and cheaper transmission of securities. The development of this technology should thus be an asset for the Paris market. The French authorities will continue to support resolutely the opportunities that arise from this technology for the financing of the economy.

This order was the subject of two phases of public consultation, the results of which were taken into account for the drafting of the text. In particular, the exchanges with relevant stakeholders made it possible to identify several fundamental requirements justifying and guiding the intervention of the legislator: clarification and legal security, technological neutrality, maintenance of the level of requirements weighing on the various categories of titles.

This measure illustrates France's pioneering strategy for financial innovation and digital finance, already proven in the field of crowdfunding or green finance. The French approach is to open legally, after wide consultation of all actors, a first field in which solutions will be developed in real conditions, allowing innovative actors to benefit from a legal certainty valuable for their development. The Action Plan for Corporate Growth and Transformation (PACTE) will make it possible to bring out new proposals on these innovative subjects.

Source: Direction générale du Trésor, France

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