The Civilisation of Crypto-Assets: Act II
With Decree No. 2026-420 of 29 May 2026, French law completes the framework governing the transfer of ownership to, and the pledging of, crypto-assets established by the 2024 and 2025 reforms. Drawing extensively on the work of the HCJP, the decree clarifies both the point at which ownership is transferred and the rules governing the creation and enforcement of security interests over crypto-assets. In doing so, it adapts to the distributed ledger technology environment, by adapting legal concepts largely inspired by the legal regime applicable to financial instruments.
In a previous briefing,[1] we welcomed the “civilisation” of crypto-assets ushered in by Ordinance No. 2024-936 of 15 October 2024. By recognizing crypto-assets as transferable intangible property and by establishing the first rules governing transfers of ownership, the French legislature finally provided them with a genuine civil law framework. This development was complemented by Law No. 2025-391 of 30 April 2025, which introduced a security interest specifically designed for these new categories of assets.
However, Articles L.226-2 and L.226-5 of the French Monetary and Financial Code delegated to implementing decrees the task of specifying the practical operation of the new regimes governing transfers of ownership and pledges of crypto-assets.
The picture is now complete following the publication of Decree No. 2026-420 of 29 May 2026, in force since 1 June 2026, which clarifies the timing of transfers of ownership and supplements the legal framework governing crypto-asset pledges.
The implementing measures are heavily influenced by the work of the Haut Comité Juridique de la Place Financière de Paris (HCJP).[2] Following its earlier contributions to the legal framework applicable to crypto-assets, the HCJP established a dedicated working group tasked with preparing draft provisions relating to transfers of ownership and pledges of crypto-assets.[3]
The provisions ultimately adopted closely follow the recommendations developed in those reports. They seek, insofar as possible, to align the legal treatment of crypto-assets with that of financial instruments recorded on distributed ledger technology (“DLT”),[4] while taking account of the specific technological characteristics of crypto-assets.
1. Transfer of ownership of crypto-assets
Article L.226-2 merely provided that ownership of crypto-assets is transferred either through the recording of the assets in favour of the transferee on the relevant DLT, or, where the assets are held through a crypto-asset service provider (“CASP”), through the recording of the transferee’s position in the position register maintained by that provider.
While registration as the operative event triggering the transfer of ownership had thus been established, the precise contours of this notion remained uncertain. It was unclear at what point in the validation process a transaction should be regarded as definitively recorded on a DLT: upon inclusion in a block, after a specified number of confirmations, or only once finality had been achieved under the consensus mechanism governing the relevant network.
New Article R.226-1 of the Monetary and Financial Code provides useful clarification by distinguishing between two situations.
- Where the transfer results from the inscription of crypto-assets in favour of the transferee on a DLT, ownership is transferred “at the moment when the recording of the digital assets in favour of the transferee becomes irreversible under the relevant distributed ledger technology, in accordance with its consensus mechanism.”[5]
The decree therefore adopts a flexible approach reflecting the diversity of existing consensus mechanisms and technological architectures. Such irreversibility may be achieved at different stages depending on the characteristics of the relevant DLT and its consensus protocol, whether after a given number of confirmations[6] or only upon definitive validation of the block containing the transaction.[7]
The decree therefore adopts a functional test based on the irreversibility of the transaction under the rules of the relevant network.[8]
- By contrast, where crypto-assets are held through a CASP, ownership passes upon the recording of the transferee’s position in the position register maintained by the custodian. Such recording must be made “as promptly as possible following settlement of the transaction”.[9]
This requirement echoes Article 75(2) of the MiCA Regulation. The decree therefore appears to distinguish implicitly between several stages of the transaction lifecycle: prior to settlement, upon settlement itself, and “as promptly as possible thereafter”, the latter corresponding to the effective entry in the position register which operates as the actual transfer of ownership.[10]
In this respect, the regime again resembles that applicable to financial instruments, where a transaction may initially be recorded by the account keeper before constituting a book-entry transfer of ownership only upon settlement.[11] This sequencing avoids the possibility that an executed but unsettled transaction could nevertheless transfer ownership of the relevant crypto-assets.
2. Creation and enforcement of pledges over crypto-assets
The decree also provides detailed rules governing pledges of crypto-assets. It specifies the content of the pledge statement, the requirements applicable to the prior notice preceding enforcement, and, absent agreement between the parties, the manner in which pledged assets are to be valued.[12]
These provisions are largely inspired by the regime applicable to security interests over securities accounts. The pledge statement must identify, among other matters, the parties, the secured obligations, and the nature and quantity of the pledged crypto-assets. To reflect the particularities of crypto-assets, it must also specify the relevant distributed ledger addresses or, where the assets are held through a service provider, the relevant crypto-asset account number.
The most innovative feature introduced by Law No. 2025-391 in this area was undoubtedly the possibility of relying on smart contracts (referred to in the legislation as “clause-executing automatons”). The decree specifies the conditions under which a smart contract may be used to execute the pledge statement and, where appropriate, the enforcement notice.
The smart contract nevertheless remains merely an execution tool implementing a pre-existing agreement. It does not replace either the parties’ consent or the contract setting out the terms of the pledge.[13]
Whereas the ACPR-AMF Fintech Forum working group on smart contract certification advocated, in the context of decentralised finance, a mandatory certification regime accompanied by proportionality safeguards, the decree adopts a more flexible approach. It does not require prior certification but instead sets out the functional requirements that a smart contract must satisfy.[14]
Accordingly, the party proposing the use of a smart contract must ensure that it guarantees the integrity, traceability, timestamping, accessibility and preservation of information, as well as the direct or indirect identification of the owner of the relevant crypto-assets. Regular backups external to the DLT environment must also be maintained as part of the operator’s business continuity arrangements.
Finally, where pledged crypto-assets are held through a service provider, that provider occupies a central position. Having been informed of the circumstances under which the pledgor may dispose of the assets, it may not execute instructions concerning those assets without the prior consent of the secured creditor.
Where enforcement is not automated, the custodian must proceed with enforcement upon the written instructions of the secured creditor and may, in the absence of an express agreement between the parties, determine the valuation methodology applicable to the pledged assets, provided that such methodology is objective and reflects normal market conditions. The decree even contemplates situations in which the custodian itself is the beneficiary of the pledge, thereby combining custody, control and enforcement functions.
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French law has therefore completed the process initiated in 2024. The 2024 Ordinance and the 2025 Law established crypto-assets as proprietary assets and laid down the fundamental principles governing their transfer and use as collateral. Decree No. 2026-420 of 29 May 2026 provides the necessary operational detail for implementing those transfers and pledges in practice.
Whether this new framework will enable crypto-assets to emerge as genuine financing instruments remains to be seen. The new pledge regime nevertheless appears to possess the characteristics required to support financing transactions secured by crypto-assets, whether within the blockchain ecosystem or, potentially, in more conventional financing arrangements beyond that ecosystem.
