For video games in France that use NFTs and crypto-powered monetization schemes, the passage of the “Sorare law” is significant because it establishes the first specific regulatory framework in the country. 561 members of the French National Assembly voted in favor of the measure, which is Section SREN of the larger Digital Space Regulation measure.
France Wants to Find a Middle Ground between Technological Advancement and Consumer Safety
The goal of the Sorare regulation, sometimes known as the “Jonum regime” (for games featuring monetizable digital assets), is to promote innovation among French gaming firms while still protecting consumers. The legislation’s official definition of “Jonum”, a term formerly without a legal definition, is a particularly noteworthy feature. With this classification in place, crypto games can be differentiated from other video games and gambling activities, which could lead to a new set of regulations.
In the eyes of Olky Wallet’s chief executive officer and head of group legal and regulatory strategy, Karima Lachgar, this is a step toward legitimizing a rapidly expanding industry that has seen its fair share of scams in recent years. This new regulation could be quite helpful for the crypto-gaming sector in France. There are still some lawmakers who are holding out hope that the Constitutional Council will review the wording and vote it down before it becomes law. Concerns have been voiced by some opposed to the law that it may favor crypto games over online casinos.
Participants Discuss the New Regulation
Karima Lachgar went so far as to say that with this new rule in place, gambling platforms might look into the “play-to-earn” and Web3 industries. Stables is a crypto-based fantasy horse racing game developed by the Pari Mutuel Urbain (PMU), the state-run betting system. The Jonum regime is exciting news for the region’s cryptocurrency gambling market. When it comes to public offering, financial stakes, and chance mechanisms, French regulators previously believed that the assets used in crypto games met the criteria defining gambling. Popular crypto games like Sorare and Stables could have faced higher tax rates if they were classified in this way.
However, the legislation specifies that the French National Gambling Authority, the Autorité Nationale des Jeux (ANJ), will be in charge of monitoring compliance. This means that customers will have to provide proof of age and identification whenever they make a withdrawal of funds from a crypto game. Importantly, there will be no need to prove your identity while signing up. The promotion of Web3 games through influencers is similarly regulated by the Jonum regime. It specifically forbids the use of influencers in marketing campaigns on publicly accessible websites.
This could mean that advertising on YouTube and other similar sites is safe to continue. The goals of the Sorare law and the Jonum regime are to establish a controlled setting for the expanding field of crypto-powered video games. This regulatory framework not only clarifies the law but also ushers in new safeguards for both consumers and businesses. However, this is a major step forward in France’s efforts to recognize and regulate the crypto gaming business, and the law’s path is not yet complete and may face potential objections before the Constitutional Council.