Regulation
Macron’s snap election throws Paris crypto scene into uncertainty – DL News
- Macron has long supported cryptocurrencies with tax incentives and support for startups.
- The potential shift of power in the French legislature could coincide with the advent of MiCA.
- Industry experts note the potential impact of right-wing influence in Brussels.
French President Emmanuel Macron has long believed in cryptocurrencies.
During his seven years in power, his government has taken numerous measures to reward founders with all sorts of incentives to set up shop in the thriving digital asset hub of Paris.
Now, the French cryptocurrency industry may have to fend for itself.
The centre-right prime minister’s decision to call early parliamentary elections on June 30 has left the digital asset industry pondering a sudden change in policy.
“It is difficult to say what will happen next, as other political parties do not have a specific position on cryptocurrencies,” said Daniel Seifert, vice president and managing director of Coinbase in Europe and the Middle East.
Crypto regulations coming soon
The June 30 election and July 7 runoff 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 lead to a right-wing majority national. Rally party and a new prime minister.
This type of hybrid government is unprecedented in French political history. But whichever party makes decisions at the national level in July will need to engage with the new European Commission on future cryptocurrency regulations.
At the top of the list: the Cryptocurrency Markets Law, which will come into full force at the end of the year and set the traffic rules for the sector.
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As it happens, MiCA rules for stablecoins go into effect on June 30th.
‘It created a lot of confidence in foreign actors in choosing Paris. This is something that could disappear.’
—William O’Rorke, ORWL
“What remains of Macron’s legacy for the cryptocurrency industry in France is yet to be seen, but his ambition has always been to make France a major crypto hub,” said Francois Volpoet, the company’s regional managing director of blockchain analysis Chainalysis.
Starting in 2017, the Macron administration opened the doors to investment in the sector. The government has adopted favorable tax breaks for start-ups and incubation opportunities for investors. As a result, the Paris crypto scene came to life.
Paris is home to numerous crypto unicorns, such as Ledger and Sorare, and sports a diverse web3 culture. The market regulator has registered more than 100 crypto firms.
Europe’s cryptocurrency industry regularly gathers in the capital’s most illustrious locations, including the Louvre, the Ritz Paris hotel and the sumptuous Palais Brongniart, the city’s former stock exchange.
Bruno Le Maire, Minister of Finance, and Jean-Noël Barrot, Minister of Digitalisation, personally welcomed cryptocurrency giants such as Circle, Binance and Crypto.com when they set up shop in Paris.
“All these players had access to the highest levels of the Ministry of Economy,” said William O’Rorke, a lawyer with ORWL, a local law firm that represents crypto firms.
“This is important because it created a lot of trust in foreign actors who chose Paris to settle. This is something that could disappear.”
But O’Rorke doesn’t imagine there will be any direct regulatory changes based on the outcome of the June election.
Many industry players remain unmoved about which party governs.
The European Parliament’s Renew party, represented by Macron, received only 15% of the vote on Sunday. The far-right Identity and Democracy party is leading the polls with over 31%. In France, this group is represented by the National Rally party.
Slight shift
While the center is largely held in Brussels, the cryptocurrency industry is trying to gauge how Sunday’s results could affect the sector across the bloc.
“The slight shift to the right could result in a greater focus over the next five years on competitiveness and growth,” said Mark Foster, head of EU policy at the Crypto Council for Innovation.
“This could lead to a more favorable framework for innovation-friendly policies.”
The left-wing Green Party suffered a major blow by losing 18 seats in the European Parliament.
“The European Parliament could reduce the attention 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 who helped shape the EU’s crypto policy in the last term.
These include center-right German parliamentarian Stefan Berger and Czech parliamentarian Ondrej Kovarik, both of whom contributed to the authorship of MiCA.
“We will still have some of our closest members in the European Parliament, the ones we have worked with over the last five years,” Astazi said.
Inbar Preiss is DL News’ Correspondent from Brussels. Contact the author at inbar@dlnews.com.