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France unveils its new law for crypto games

France

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TL;DR

  • France is moving closer towards a new law to regulate the NFT games industry.
  • Stakeholders give their opinions on the new law.

In a notable move, France has passed the “Sorare law”, which marks the country’s first dedicated regulatory framework for video games incorporating NFTs (Non-Fungible Tokens) and crypto-powered monetization strategies. The law is a part of the broader Digital Space Regulation Law, known as SREN, and was voted upon by 561 members in the French National Assembly.

France aims to strike a balance between innovation and user protection

The Sorare law, often referred to as the “Jonum regime” (standing for games with monetizable digital objects), is aimed at striking a balance between fostering innovation among France-based startups in the gaming industry and ensuring the protection of users. One of the most significant aspects of this legislation is the formal definition of “Jonum,” a term that had been previously lacking in legal terms. This definition opens the door to a potential new regulatory framework tailored specifically to crypto games, setting them apart from traditional video games and gambling activities.

Karima Lachgar, CEO and Head of Group Legal and Regulatory Strategy at Olky Wallet sees this development as a means to legitimize a fast-growing sector that has faced its share of scams in recent years. The crypto-gaming industry in France may benefit greatly from this new framework. Before becoming law, the text will undergo examination by the Constitutional Council, which holds the authority to review and potentially reject it—a possibility that some deputies are still hoping for. Opponents of the law have raised concerns that it might give preferential treatment to crypto games over online casinos.

Stakeholders give their opinions on the new law

Karima Lachgar even suggested that under this new law, gambling platforms might consider entering the “play-to-earn” and Web3 sector. The Pari Mutuel Urbain (PMU), the state-controlled betting system, has already ventured into the crypto space with its fantasy horse racing game called Stables. The Jonum regime represents a promising development for the local crypto-gaming industry. In the past, French regulators had considered the assets used in crypto games to meet the criteria defining gambling, including public offering, financial stakes, and mechanisms involving chance. This classification could have subjected popular crypto games like Sorare and Stables to heavier tax burdens.

However, the text stipulates that the Autorité Nationale des Jeux (ANJ), the French National Gambling authority, will be responsible for overseeing compliance. This means that users will need to verify their age when creating an account for a crypto game and verify their identity when withdrawing in-game earnings. Importantly, no identity verification will be required during the registration process. The Jonum regime also includes measures affecting the promotion of Web3 games using influencers. Specifically, it prohibits the use of influencers for promotional activities on online platforms that cannot exclude minors.

This implies that promotional efforts on many social media platforms, including YouTube, may remain unaffected. The Sorare law and the Jonum regime aim to create a regulated environment for the growing sector of crypto-powered video games. This legal framework not only provides clarity but also introduces protective measures for users and the industry as a whole. While the law’s journey is not yet complete and may face potential challenges in the Constitutional Council, it represents a significant step towards recognizing and regulating the crypto gaming industry in France.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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