On Friday, the Minister of Finance of France, Bruno Le Mayor reported on the decree, which allows you to trade unquoted securities accounting on the basis of the blockchain.
Thanks to the adoption of new laws to implement the changes, France will become the first country in Europe where the auction will be resolved with the use of technology protection from unauthorized access.
The French government has set up financial technology companies for trading of unquoted securities through blockchain platform.
The new legislation will apply only to Unlisted securities such as stocks and bonds, non-listed, hedge funds and shares in a mutual Fund, are not subject to the EU legislation. The market of Unlisted securities is estimated at over 3 trillion euros. According to Le Mare:
“The use of this technology will enable financial technology companies and other financial participants to offer new solutions for the exchange securities, decisions that are faster, cheaper, transparent and safe.”
In recent times, the blockchain technology has become the new trendy word to ensure trust in transactions. The original purpose of technology was to eliminate middlemen and transfer funds to unknown people online in a reliable way.
“Favorable to the blockchain”, the government
The new government of France can be called “favorable to the blockchain”. Earlier the President of France Emmanuel macron described the possible use of blockchain technology in the securities market.
Macron said: “Financial regulation will allow to conduct experiments with bloccano intended for the bond market… In the case of conclusive results of experiments the government will extend the regulation to Unlisted securities, to encourage the emergence of small and medium exchanges.”
During the year, the French authorities worked on amendments to the law on securities to implement blockchain technology to the markets. In March of this year, the French Treasury has initiated public meetings associated with the use of technology and its impact on regulations on securities.
September 19, 2017, the Treasury published a reform strategy to create new legislation. Therefore, France becomes the first European country with a legal framework to regulate the use of blockchain technology. The introduction of the new rules is a step to more ambitious initiatives.
Stephen Maijoor, Chairman of the European securities and financial markets, said: “We systematically explore financial innovation, assessing the risks and study opportunities and the application to them of laws and normative-legal acts”.
Approaching the new reform
The platform will allow startups and investors to conduct trades on the platform. According to Le Mayor: “This decree is a way to say “carry out tests in real conditions here as part of a safe regulatory framework””. Also the purpose of technology is to make trading more safe and fast.
The only drawback of the new regulation is to reduce the involvement of brokers as in a futuristic space there is no place for intermediaries. However, listed securities and then necessarily pass through clearing houses and depositories.
FINTECH companies also expressed some uncertainty regarding the adoption of new technologies for record keeping. In addition, there are fears that supporters of the technology in the financial industry did not support the blockchain due to the lack of clear regulation. Probably, the situation will change, because, apparently, the government aims to promote technology.
The Central Bank of France also supportive of the blockchain, but not bitcoin
In addition to this, the Central Bank of France is interested in using the technology underlying bitcoin, but not the most crypto-currencies. In February of this year, he launched an innovative laboratory, which plans to interact with the blockchain startups.
Recently the head of the Bank of France françois Villeroy de Galhau warned people investing in bitcoin that they “do so entirely at your own risk”.
France – not a single country in which exercised such initiative. Soon the Australian stock exchange will move to a newly developed blockchain-a platform that will provide better security operations.
In the US the CBOE Global Market Inc. and CME Group Inc plans to launch bitcoin futures before year-end. In July in Italy, only one exchange – Borsa Italiana – tested blockchain-based platform for the issuance of shares of unquoted companies.
The new reform will ensure the growth of FINTECH start-UPS, which ultimately can turn Paris into a modern financial centre of Europe.