President Emmanuel Macron of France has long believed in crypto.
During his seven years in power, his government has taken numerous steps to reward founders with all manner of incentives to set up shop in Paris’s burgeoning digital assets hub.
Now, France’s crypto industry may need to fend for itself.
The centre-right premier’s decision to hold a snap parliamentary election on June 30 has left the digital assets industry pondering a sudden shift in policy.
“It is hard to say what’s next, as the other political parties don’t have specific positioning on crypto,” said Daniel Seifert, Coinbase’s vice president and managing director in Europe and the Middle East.
Incoming crypto regulations
The election on June 30 and runoff on July 7 will not end Macron’s five-year term — the presidential contest won’t be held until 2027. But asking voters to elect a new National Assembly could result in a majority led by the right wing National Rally party, and a new prime minister.
This type of hybrid government is not unprecedented in French political history. But whichever party calls the shots domestically come July, it will have to engage with the new European Commission on incoming crypto regulations.
At the top of the list: the Markets in Crypto-Assets law which comes into full force at the end of the year and will lay out the rules of the road for the industry.
As it happens, MiCA’s rules for stablecoins go live on June 30.
‘It created a lot of confidence for foreign actors to choose Paris. This is something that may disappear.’
William O’Rorke, ORWL
“What remains of Macron’s legacy for the crypto industry in France is yet to be seen, but his ambition has always been to make France a major crypto hub,” said Francois Volpoet, a regional managing director at blockchain analytics firm Chainalysis.
Starting in 2017, Macron’s administration threw open the doors for investment in the sector. The government deployed favourable tax breaks for start-ups and incubation opportunities for investors. As a result, Paris’s crypto scene sprang to life.
Paris is home to several crypto unicorns, such as Ledger and Morpho, and sports a diverse web3 culture. The market regulator has registered more than 100 crypto firms.
Europe’s crypto industry gathers regularly in the capital’s most illustrious venues, including the Louvre, the Ritz Paris hotel, and the palatial Palais Brongniart, the city’s old stock exchange.
Bruno Le Maire, the finance minister, and Jean-Noël Barrot, the digitalisation minister, personally welcomed crypto giants such as Circle, Binance, and Crypto.com when they set up shop in Paris.
“All these players had access to the top level of the ministry of economy,” said William O’Rorke, a lawyer with ORWL, a local law firm that represents crypto ventures.
“That’s important because it created a lot of confidence for foreign actors to choose Paris to set up. This is something that may disappear.”
But, O’Rorke doesn’t imagine there will be direct regulatory changes based on the result of the June elections.
Many industry players remain unphased by which party rules.
The European Parliament’s Renew party, which Macron represents, won only 15% of the vote on Sunday. The far-right Identity and Democracy led the polls with more than 31%. In France, this group is represented by the National Rally party.
Slight shift
While the centre largely held in Brussels, the crypto industry is trying to gauge how the results Sunday may affect the industry across the bloc.
“The slight shift to the right may well see a greater focus over the next five years on competitiveness and growth,” said Mark Foster, EU policy lead at the Crypto Council for Innovation.
“This could lead to a more enabling framework for innovation friendly policies.”
The left-wing Green Party took a hit losing 18 seats in the European Parliament.
“The European Parliament might decrease the focus that was around Bitcoin and the energy consumption of proof-of-work mechanisms,” said Tommaso Astazi, head of regulatory affairs at Blockchain for Europe.
The elections also saw the return of some of the lawmakers that helped shape EU crypto policy in the last mandate.
They include German centre-right lawmaker Stefan Berger and Czech lawmaker Ondrej Kovarik, both of whom helped author MiCA.
“We will still have some of our closest members of the European Parliament, the ones that we’ve been working with for the past five years,” Astazi said.
Inbar Preiss is DL News’ Brussels correspondent. Contact the author at inbar@dlnews.com.