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The new Pacte Act in France gives for the first time insurers the option to offer life insurance products which are linked to cryptocurrency funds. LREM member of Parliament, Joel Giraud, has confirmed this in a recent statement.
In April, France’s deputies passed the Pacte Act, and it was just promulgated by french president Emmanuel Macron, which means it comes immediately into effect. The act, among other things, allows for specialized professional funds (SPF) to be packaged in with life insurance accounts. Any limits on SPFs have effectively been removed and are left to the experience and financial situation of the investor.
Additionally, another article of the act clarifies that an SPF can be recorded electronically on a shared Blockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless... More. Naturally, this includes blockchain technology. According to Emilien Bernard-Alazias, a lawyer at Simmons & Simmons LLP:
With these two provisions, it is written in black and white that SPFs can invest in crypto-assets like bitcoin.
Although the law is clear that cryptocurrency-related SPFs can be linked to life insurance accounts, whether or not it will be popular is another question entirely.
Two main issues remain — namely, risk and low liquidity. The cryptocurrency market is far too volatile which scares most investors looking to park their funds for life insurance accounts.
There is also a steep learning curve when it comes to cryptocurrencies which insurers might not be willing to put up with.
However, with the passage of France’s Pacte Law, cryptocurrency-linked funds will inevitably become more common in the near future as they become packaged with SPFs, even only partially. It’s only a matter of time before a startup or innovative investment firm makes this idea into reality — especially considering its legality has now been resolved. All that’s required is accessibility and easy-to-understand investment options for cryptocurrency-linked SPFs to become more popular.
Although the Pacte Law had little to do with cryptocurrencies directly, it nonetheless will likely have a significant impact. It essentially opens the door to cryptocurrency-linked investment vehicles. With such opportunities, it’s hard to believe that French investment firms would not jump into this opportunity wholesale.
Correction (2019-05-27): The article has been updated to reflect that the Pacte Law was adopted in April.
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