French Fintech Framework for the Future
France is seeing a booming startup culture thanks to blockchain technology. While several years ago, the country was a deadzone for fintech or internet based companies, France has seen a resurgence of its entrepreneurial spirit owing to crypto, blockchain, and fintech friendly legislation.
While France is far from the the center of attention in Europe’s thriving blockchain community, it is a quickly growing powerhouse. Adoption and use of cryptocurrencies is widespread in major cities. Walking through the streets of Marseille, it is easy to strike up a conversation about the debate between Ethereum and Bitcoin or about open ledger technology. It seems that every day there is a new French startup to watch.
A part of this change has to do with recent developments in French culture and financial regulations. Entrepreneurialism is hailed as a value in the United States, and thus, banking regulations allow businesses to fold without the entrepreneur facing catastrophic consequences. In contrast, till recently, France had some of the most stringent bankruptcy laws on the books, which often made starting a tech business too risky to venture.
However, new legislation by French President Emmanuel Macron has taken aim at giving French entrepreneurs more leeway in starting a business. Furthermore, the French government has enacted legislation to encourage cryptocurrency business to take hold in France, hoping to become a European standard bearer in decentralization.
Making a Friendly Framework
In March of 2018, French Finance Minister Bruno Le Maire announced the beginning of a regulatory framework for companies raising money using cryptocurrencies. The goal is to make France ground zero for ICOs. However, after the explosion of ICOs last year, the French have to be careful that their regulatory framework encourages the right kind of ICOs.
National watchdog groups have sent out several warnings against crypto companies which could use the digital currency to launder money for illicit activities. More to the point, there is concern that companies financed by cryptocurrencies might be unable to deliver on their promises. These are risks that the French government is willing to accept if they are to become a global leader in the adoption and use of cryptocurrencies as well as blockchain technology.
Cutting Taxes on Crypto
Most recently, the French government cut its cryptocurrency tax rate from 45 percent, to 19 percent. Chain Accelerator, an industry leader in blockchain accelerators recently opened in Paris, encouraging new startups to adopt the emerging technology. France has even launched an easy to access “tech visa” in order to encourage foreign entrepreneurs to bring their startups.
All of these changes have inspired the entrepreneurial French spirit and allowed them to take the plunge into starting a tech business. Of course, some of the credit is due to the open source nature of blockchain and to widespread access to technology. It remains to be seen if the recent changes in the French regulatory system will pay dividends, but it is clear that they are building an attractive framework.