French Pacte Act Allows Crypto-Pegged Life Insurance Policies

The Pacte Act in France is paving the way for the first time in history where insurers have the option to offer life insurance policies which are linked to cryptocurrency assets. Joel Giraud, an LREM member of parliament, confirmed the news in a recent statement.

Back in April, French deputies passed the Pacte Act, and it was recently promulgated by Emmanuel Macron, the French president. This, of course, means that the act will immediately come into play. The new bill will allow for specialized professional funds (SPFs) to be included with life insurance packages. Any limits on SPFs which have been found in the past have been eliminated and now left up to the experience and finances of the investor.

In addition to this, the new act also states that an SPF can be recorded electronically on a shared ledger, and this, of course, includes blockchain technology.  As per a statement from 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.”

Could French Insurers Opt For Crypto?

Although the law is clear on whether crypto-related SPFs can indeed be linked to life insurance accounts, whether they become popular amongst firms is an entirely different question altogether.

The two glaring issues are, of course, risk and low liquidity. Currently, the crypto market is still far too volatile, scaring most investors off who are seeking to keep their funds for life insurance accounts.

Not to mention the steep learning curve which comes along with cryptocurrencies which many traditional insurers may not be keen on putting up with.

How Will The Pacte Act Affect Cryptocurrencies?

Of course, with the passing of the French Pacte Law, crypto-backed funds will more than likely become more common in the future as they become linked to SPFs. It’s a matter of time before a startup takes the lead and turns the idea into reality, mainly since the legality of it has been determined. All that is now required is accessibility as well as easy-to-understand investment prospects before crypto-backed SPFs become successful.

Although the Pacte Law has little to do with cryptocurrencies directly, it will have a significant impact regardless. It, in a nutshell, will open the door to crypto-backed investment opportunities.