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France Set to Approve First Crypto Firms Under New Rules This Month

France is poised to approve initial coin offerings operators and other crypto businesses with its new regulatory approach to the sector.

France is poised to approve initial coin offerings (ICO) operators and other crypto businesses with its new regulatory approach to the sector. 

‘France is a Precursor’

As Reuters reported on July 16, the new rules — expected to take effect later this month — will enable crypto-related businesses to voluntarily submit themselves to national standards on capital requirements, consumer protection and taxation in return for the regulator’s green light.  

Anne Marechal — executive director for legal affairs at the Financial Markets Authority (AMF) — told reporters that the bold crypto regulatory agenda from the G7 presidency holder should make France a forerunner in the field. She said:

“France is a precursor. We will have a legal, tax and regulatory framework […] We are in talks with three or four candidates for initial coin offerings.”

Beyond ICOS, the AMF is also in talks with several crypto exchange platforms, custodians and fund managers, Marechal revealed.

As Reuters notes, momentum to provide greater legal clarity for the little-regulated sector has apparently been galvanized by news of the forthcoming Libra cryptocurrency from U.S. tech behemoth Facebook. 

A meeting of G7 finance ministers in Chantilly, France, today could see France’s Bruno Le Maire and the U.S. Treasury Secretary Steven Mnuchin finding a rare island of common ground when it comes to cryptocurrencies — and Facebook’s plans in particular — against a backdrop of ever-rising transatlantic trade tensions.

The Crypto Regulatory Roulette

Gaging the appetite for regulation in the nascent industry is complex and while some believe that increased oversight could bring greater reputability to crypto firms, change is also fraught with risks. Those unwilling to court the unknown are preemptively selecting proactive jurisdictions to launch their offerings. 

As Frederic Montagnon — a co-founder of LGO, a New York-based cryptocurrency platform that chose to host its ICO in France — told Reuters:

“When you are an entrepreneur, the worst that can happen to you is to set up your business where there is no regulation, to see an adverse regulatory framework later imposed that jeopardizes your whole business.”

As reported, the crypto markets have taken a wild turn after both President Trump and Mnuchin’s explicit focus on the risks of cryptocurrencies — yet some are taking a “no news is bad news” perspective on such high-profile airtime for the sector. 

Le Maire has meanwhile characterized Libra as an “attribute of the sovereignty of the States” and revealed that France intends to demand guarantees from the social media titan in liaison with G7 central bank governors.

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French Regulators Notice Uptick In Crypto-Related Complaints

French authorities have observed an uptick in cryptocurrency-related complaints from investors.

French financial regulators have observed an increase in complaints regarding cryptocurrencies this year.

Investors in the country are increasingly filing complaints about digital currencies with France’s Financial Markets Authority (AMF) since January 2019, according to the AMF’s 2019 Risk Map report published on July 2.

Percentage of claims to AMF regarding crypto assets

Percentage of claims to AMF regarding crypto assets. Source: AMF     

The Risk Map analyzes the major factors that have an impact on the country’s financial markets along with associated risks. 

At the same time, 2019 has reportedly seen a drop in the number of enquiries received by the AMF’s consumer contact center in regard to digital currency. The document further notes that investors continue to express interest in speculative products like binary options, foreign exchange, contracts for difference and crypto, despite the AMF’s efforts to limit the marketing of such products.

From 2016 to 2018, the AMF issued 118 warnings against crypto-related bad actors out of 154 warnings overall.

In its annual report released in May, the AMF noted a 14,000% surge in enquiries related to fraudulent cryptocurrency offers in 2018 as opposed to 2016. Specifically, the number of enquiries associated with crypto-related scams online surged to over 2,600 in 2018 from only 18 similar enquiries back in 2016.

A survey from Tokyo-based crypto exchange bitFlyer published in April showed that the majority of Europeans believe that crypto will exist in 10 years, wherein French respondents were more pessimistic about the future of crypto, with only 55% claiming that they believe in crypto in the long term.

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Goldman Sachs ‘Looking at Potential’ of Creating Virtual Currency, CEO Reveals

Goldman Sachs chief executive David Solomon says he believes global payment systems are heading in the direction of stablecoins.

Goldman Sachs is performing “extensive research” on tokenization, the group’s chief executive told France’s Les Echos newspaper on June 27.

David Solomon said he believes global payment systems are heading in the direction of stablecoins cryptocurrencies pegged to fiat assets such as the U.S. dollar.

Although he stopped short of confirming whether Goldman Sachs has had discussions with Facebook about its upcoming libra cryptocurrency and Calibra wallet, Solomon said his corporation finds the concept “interesting.”

When asked whether Goldman Sachs will follow JPMorgan Chase in launching its own virtual currency, Solomon said:

“Assume that all major financial institutions around the world are looking at the potential of tokenization, stablecoins and frictionless payments.”

Elsewhere in the interview, Solomon predicted that regulations will change in response to virtual currencies — but said he doesn’t think new entrants in the cryptosphere will force banks to close. He added:

“Admittedly, they will have to evolve, because the trades linked to the payment flows will become less profitable. But there are many other reasons why banks must remain innovative, otherwise they will disappear.”

Solomon also suggested that tech giants such as Facebook would like to avoid the regulatory constraints that banks face, making it more likely that they would try to enter into partnerships than become financial institutions themselves.

Earlier this week, reports suggested that JPMorgan Chase is set to begin piloting its own cryptocurrency by the end of this year.

Back in April, Solomon categorically denied that Goldman Sachs ever had plans to open a crypto trading desk during a hearing before the United States House of Representatives Financial Services Committee.

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French Central Bank: Facebook’s Libra May Need Banking License

The Bank of France Governor said that Facebook’s Libra must comply with anti-money laundering regulation and seek banking licenses if it offers banking services.

Bank of France Governor Francois Villeroy de Galhau said that Facebook’s Libra stablecoin must comply with anti-money laundering regulation and seek banking licenses if it offers banking services, Reuters reports on June 25.

Per the report, while Villeroy admitted during an interview with French magazine l’Obs that there was room to improve cross-border money transfers. He also pointed out that Facebook’s libra project has to comply existing banking regulation because “the risks are increased by the anonymity that Libra users would have.” 

Villeroy also touched on possible requirements for a banking license:

“If the project seeks to go beyond payments to offering banking services like deposits, it will then have to be regulated like a bank with a banking license in all the countries it operates. Otherwise it would be illegal.”

As Reuters reports on June 25, alternate member of the Swiss National Bank’s governing board Thomas Moser, said at the Crypto Valley Conference in Zug reportedly said that he is open-minded about Facebook’s cryptocurrency project:

“Overall I think it’s an interesting development and I’m pretty relaxed about it. […] They have clearly indicated that they are willing to play according to the rules, they have been contacting the regulators.”

Head of the Bank of Italy’s head of market and payment system oversight allegedly declared that he wants to have more information about the Libra project. 

As Cointelegraph recently reported, French Minister of the Economy and Finance intends to “ask for guarantees” from Facebook in regards to its forthcoming digital currency Libra. Maire also asked the governors of the G7 central banks to report what guarantees are to be obtained from Facebook.

Yesterday, a former economic adviser to United States President Donald Trump expressed support for Facebook’s stablecoin Libra.

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French Minister of Economy to Ask for Guarantees From Facebook In Regards to Its Forthcoming Coin

French Minister of the Economy and Finance, Bruno Le Maire intends to ask Facebook for guarantees for its forthcoming digital currency Libra.

French Minister of the Economy and Finance intends to “ask for guarantees” from Facebook in regards to its forthcoming digital currency Libra, media outlet Europe 1 reported on June 18.

The Minister of the Economy and Finance, Bruno Le Maire told Europe 1 that Facebook’s long-awaited stablecoin Libra is an “attribute of the sovereignty of the States” and should “remain in the hands of the States and not of the private companies which answer to private interests”.

Le Maire stated that he will “ask for guarantees” from the social media giant such as “the guarantee that this instrument of transaction can not be diverted to finance terrorism or any other illegal activity”. Le Maire also asked the governors of the G7 central banks to report what guarantees are to be obtained from Facebook. Le Maire said:

“We have to make sure that there is no risk for the consumer, it is our role as a state to protect consumers. […]  It will allow Facebook to accumulate millions and millions of data again, which strengthens me in my belief that it is necessary to regulate the digital giants, to make sure that they do not end up in monopolistic situations.”

Earlier today, Facebook released cryptocurrency and blockchain-based financial infrastructure project. The stablecoin will operate on the native and scalable Libra blockchain, and be backed by a reserve of assets ostensibly “designed to give it intrinsic value” and mitigate volatility fluctuations.

As Libra is not technically pegged to any given national fiat currency, the white paper states that users will not always be able to redeem the token for a fixed amount of fiat, although Facebook claims that the reserve assets have been chosen so as to minimize volatility.

Facebook has also revealed the release of the Libra Investment Token — distinct from its global user-oriented cryptocurrency Libra — which can be purchased or distributed as dividends to the governing association’s founding members and accredited investors.

As previously reported, the cryptocurrency is set to facilitate payments across Facebook’s various platforms including WhatsApp, Messenger and Instagram, giving the new coin potential exposure to a combined 2.7 billion users each month.

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Tezos Commons Exec Raises Concerns Over Suspicious Activity by Hard Fork Developers

OCamlPro and Starchain Capital are not acting in users’ best interest, Tezos Commons executive director Shaun Belcher says.

Members of the community around decentralized platform Tezos have raised concerns about an alleged upcoming hard fork of its blockchain. The issue appeared in a blog post by Tezos Commons executive director Shaun Belcher on June 17.

Discussing what he described as evidence of collusion between two third-party entities, Belcher warned that the hard fork, planned for September, was an attempt to split Tezos user sentiment.

The parties involved are the management team of OCamlPro, a French programming language, and blockchain fund Starchain Capital, which Belcher intimates as mysterious.

“It’s worth remembering that anyone can fork the Tezos software, which is open source,” Belcher wrote. He added:

“The issue is not that they intend to fork Tezos, but the alleged manner in which OCamlPro leadership conducted itself, in bad faith, and misrepresentation of historical behavior to be in the best interest of the community.”

The dispute centers around several areas, including claims made by OCamlPro in correspondence with Starchain.

Its founder, Fabrisse Le Lessant, for instance, claims he mentored Tezos’ co-founder, Arthur Breitman.

“They did not create OCaml, Fabrice was not the ‘teacher’ of Tezos co-founder Arthur Breitman, and the main Tezos engineers who were originally at OCamlPro are now working at Nomadic Labs, not OCamlPro,” Belcher highlights.

The real issue stems from the apparent links between Le Lessant and Starchain, which appeared as a United States registered company just weeks ago.

Uploading copies of related documents, Belcher reinforced existing suspicions on social media that the entire hard fork was a calculated move.

“If any of these assumptions formed from these revelations are incorrect, we strongly urge Fabrice and others from OCamlPro to address these concerns,” he concluded.

Hard forks have succeeded in sparking community division in the past. Notably, the bitcoin cash (BCH) fork of the bitcoin (BTC) blockchain delivered two opposing forces which initially panicked markets in 2017.

BCH then itself hard forked in November 2018, creating an opposing faction within the user base while also sending ripples through BTC markets.

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Report: French Gaming Giant Ubisoft Considering Potential Blockchain Applications

Ubisoft is allegedly exploring potential blockchain applications in gaming as a strategy to gain a more competitive edge in the industry.

French video gaming giant Ubisoft is allegedly exploring potential blockchain applications in gaming as a strategy to gain a more competitive edge in the industry. The news was reported by daily French financial newspaper Les Échos on June 11.

Per Les Échos, Ubisoft has been quietly exploring blockchain applications for several months, and has allegedly already identified one in particular for implementation. The paper write that Ubisoft reportedly plans to put intra-game virtual objects or accessories onto the blockchain and monetize them.

As the report notes, the model bears some similarity to that of the overwhelmingly successful video game Fortnite — published by Epic Games — which is free in itself to purchase, but allows gamers to buy virtual content that equips their game character.

The virtues of a blockchain-powered ecosystem for virtual accessories would be that it preserves gamers’ digital property rights. Citing an unnamed industry specialist, Les Échos notes:

“When you buy a costume on Fortnite, your investment is lost, the accessory is locked in the game. If we use the blockchain, we give a physical existence to a digital element.”

An anonymous source allegedly close to Ubisoft’s blockchain explorations told Les Échos that the firm would consider using the Ethereum blockchain for its application, and claimed that work on the initiative was already at an advanced stage.

It has not been disclosed whether Ubisoft would launch blockchain-based virtual content within one of its existing franchises or a brand new game, although Les Échos notes that the second option could ostensibly carry lower risks.

For the time being, no timetable is reported to have been set and the firm ostensibly continues to explore possibilities — meanwhile anticipating that French legislation on blockchain will be further clarified.

Ubisoft is a publicly traded company, as Les Échos notes, and claims that the markets could react in an unpredictable manner to the launch of a project using such an uncharted and innovative technology.

As reported this spring, blockchain startup Animoca Brands announced it had signed a global licensing agreement with Formula 1 to publish a blockchain game based on the world-renowned racing series. Animoca had also previously entered a licensing agreement with Atari — famous for being the developer of iconic video games such as Tetris and Pac Man.

In February 2018, Atari saw its share price skyrocket by over 60 percent after announcing that it would be investing in cryptocurrency.

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French Retail Chain Carrefour Registers Sales Boost Following Blockchain Integration

French retail giant Carrefour has seen an increase in sales after the implementation of a blockchain-based tracking system.

French retail giant Carrefour has seen an increase in sales after the implementation of a blockchain-based tracking system, Reuters reported on June 3.

Carrefour’s blockchain tracking system enables customers to track the supply chain of 20 items, including meat, milk, and fruit from farms to stores, thus avoiding products with genetically modified organisms, antibiotics, and pesticides. This year, the company reportedly plans to add 100 more products, including non-food lines, to the system.

Emmanuel Delerm, Carrefour’s blockchain project manager, told Reuters that “the pomelo sold faster than the year before due to blockchain. We had a positive impact on the chicken versus the non-blockchain chicken.”

The company also revealed that the tracking system was most widely used in China, followed by Italy and France. “Millennials are buying less but buying better products for their health, for the planet,” Delerm said.

Carrefour initially began working on the tracking system in collaboration with IBM by joining IBM’s blockchain-based food tracking network dubbed Food Trust last year along with other supermarket chains and retail companies like Nestle SA, Dole Food Co., McCormick and Co., McLane Co., Tyson Foods Inc., and Unilever NV, among others.

In mid-April, Carrefour and Switzerland-based food giant Nestlé partnered with IBM to use the latter’s blockchain technology to track the supply chain of Mousline, a well-known brand of instant mashed potatoes. The system lets consumers check the varieties of potato used, the dates and places of manufacture, information on quality control, and places and dates of storage.

Recently, Big Four audit firm EY revealed that it is now providing its proprietary blockchain solution for a major new platform that helps consumers across Asia determine the quality, provenance and authenticity of imported European wines.

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World’s Second and Fourth Biggest Shipping Firms Join Maersk’s Blockchain Platform

Swiss Mediterranean Shipping and French CMA CGM have both joined TradeLens.

Two leading global shipping firms, Mediterranean Shipping Co (MSC) and CMA CGM, have joined blockchain shipping platform TradeLens, Reuters reports on May 28.

Switzerland-based MSC, the world’s second-largest shipping company, and French CMA CGM, reportedly the fourth-largest container shipping firm, have joined the blockchain platform developed by the world’s largest logistics company Maersk and tech giant IBM.

As previously reported, blockchain-powered shipping solution TradeLens intends to reduce paperwork and associated costs and time in the logistics industry — which reportedly accounts for $4 trillion — with over 80% of the goods carried by the ocean shipping sector.

According to Reuters, by joining the platform, MSC and CMA CGM will have almost 50% of all cargo shipped by sea tracked using distributed ledger technology (DLT).

Vincent Clerc, Maersk executive vice president, considers the entrance of MSC and CMA CGM to the TradeLens platform a “game changer,” Reuters writes. Clerc noted that clients have to carry out a massive amount of paperwork without a transparent view of what is going on with their goods, with Reuters adding that paperwork amounts to almost 20% on average of the cost of shipping a container.

The TradeLens blockchain shipping solution was launched by Maersk and IBM in August 2018, with around 100 global organizations involved and 154 million shipping events captured at the time. Integrating Internet of Things and sensor data, the platform is capable of tracking containers, as well as a number of variables such as temperature control and container weight.

Recently, the World Economic Forum partnered with more than 100 global supply chain and logistics leaders to standardize blockchain apps in the industry. The project reportedly includes over 20 governments, as well as major shippers and supply chain suppliers including Maersk, Hitachi and Mercy Corps, among others.

Previously, Marseille Fos Port, the main French trade seaport, announced it will run a blockchain pilot for freight logistics in June 2019.