At present, the crypto market as well as the overall financial sector is undergoing a volatile run in the US.
France is looking to establish itself as a crypto hub in the EU
Photo Credit: Pixabay/ Sergie Tokmakov
The US, which is currently undergoing a tumultuous financial time, could be scaring crypto companies to flee out to the international markets. France, meanwhile, seems to be looking at this difficult situation in the US as a way to boost its own crypto and Web3 ecosystem. The country has invited crypto players looking to set their businesses outside of the US to do so in France. The development comes just a day after the European Union (EU) gave its final approval to a comprehensive set of regulations that have been curated to uniformly govern the digital assets sector in all of the EU regions.
“If American players want to benefit, in the very short term, from the French regime, and from the start of 2025 from European arrangements, clearly, they are welcome. In France, we are proud to be pioneers,” a CoinDesk report quoted Benoît de Juvigny, Secretary General of the Autorité des marchés financiers (AMF). The AMF is essentially the financial markets authority of France.
At present, the crypto market as well as the overall financial sector is undergoing a volatile run in the US. In addition, the consecutive interest rate hikes from the Fed in the US have added to the prevailing pressure on the financial market, including the crypto sector.
Between November 2022 and January 2023, the nominal broad dollar index fell almost seven percent, according to a JP Morgan insight.
Circle Pay CEO Jeremy Allaire had recently said that US' ongoing financial slump is deepening the phenomenon of de-dollarisation in several parts of the world.
When other countries in the world begin to reduce their dependency on the US dollar as a reserve currency or a medium of exchange, the process is called ‘de-dollarisation'. The US dollar has reigned over the global economy for decades. Consecutive interest rate hikes in the US, however, have caused many international central banks also to spike their interest rates and save their fiat currency against depreciation.
Last month, three traditional crypto-friendly banks collapsed in the US within one week, scaring investors and the common public.
The Federal Reserve Bank of Chicago (FRBC) in its recent report blamed that the downfalls of crypto projects like Terra and FTX last year has caused the ongoing banking crisis in the US in its aftermath.
In addition, the US Securities and Exchange Commission (SEC) has been tightening its noose around crypto businesses. Companies like Binance and Coinbase have been roped-in by the SEC for probes around their business practices.
Accessing the magnitude of this ongoing financial chaos in the US, France has extended an invite to crypto firms wishing to flee the complexities.
Presently, Bitstamp and Binance are among the 74 crypto firms that have secured operational licences in France, the CoinDesk report noted.
It is estimated that around 3.4 million French citizens held cryptocurrency in 2021 and the holders in the country are projected to grow by 7.43 percent to sit at a valuation of around $980.10 million (roughly Rs. 8,072 crore) by 2027.
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