Is France the next crypto haven?
Since January 2015, when we launched our cryptocurrency trading service, we have been wondering where could be the next “crypto-haven”, after our Hong Kong headquarters. At that time, Hong Kong was clearly the ideal place to run a cryptocurrency business. Indeed, Hong Kong was a reputable financial hub: the first country for cryptocurrency trading, proximity to Mainland China, and the largest remittance market South East Asia (international remittances were seen as the main application of Bitcoin back in the days.) However, with Hong Kong Financial Authorities reluctant to regulate cryptocurrencies, and Mainland China suddenly putting a ban on Initial Coin Offerings (ICOs) and cryptocurrency exchanges, the Hong Kong crypto landscape does not seem as rosy as it used to be.
As a result, we tried to define the fundamentals of this “crypto haven”. This land is a place:
- where the administration is open to cryptos;
- where there is a nascent ecosystem;
- where competition in our sector that is lower than our initial market, and weaker than in the most advanced ecosystems such as the United States or Japan;
- where we have an edge over the competition.
After months, we realized that this place may well be France, if the political promises are not left empty.
An important decision factor has been that the French administration and French financial regulator, the AMF, recently adopted a very positive stance regarding the Blockchain ecosystem. After having initiated a public consultation about Initial Coin Offerings (ICOs), we are expecting the AMF to issue a legal framework for ICOs. Furthermore, the recent decision of the French State Council to cut the cryptocurrency tax rate has been perceived very positively by the ecosystem.
The upcoming ICO legal framework should be a game-changer for our industry, as the lack of visibility regulatory-wise regarding ICOs was making most institutional investors reluctant to take positions. Defining an efficient legal framework for ICOs may attract project founders, the institutional money flow and more generally the entire emerging Blockchain ecosystem to France, which makes this country extremely appealing for a stakeholder like us.
More importantly for our business, a French Deputy from LREM, Mr. Pierson, recently announced at cryptocurrency event in Paris, that not only ICOs will be regulated, but also crypto-to-fiat exchanges incorporated in France would fall into the supervision of the French financial regulator. I believe that the regulatory framework should take the form of a specific license granted by the French financial regulator.
This French crypto-exchange licence should legitimize the businesses like Gatecoin to the mainstream, but also financial institutions, as well as institutional investors that are willing to take positions in cryptocurrencies. It will also enable France to become a key normative power in this booming sector.
This favorable political stance is having a huge impact on the French crypto economy: Havas has recently launched a Blockchain expertise, supporting French-based projects like Talao, while consulting firms such as PwC France provide a set of business and technical services for ICOs (e.g. smart contract audits). This should incentivize major French-based Blockchain startups, like Tezos or Ledger, to maintain most of their operations on the national territory, unlike South Korean and Chinese players, which moved away after the crypto and ICO bans last year in their own countries.
Paradoxically, despite the high quality of the French Blockchain projects, and more generally European-based Blockchain projects, they often struggle with getting investments compared with Silicon-Valley based projects, or even Japanese, Chinese and South Korean projects.
This situation led us to believe that there was a great opportunity window for Gatecoin. Indeed, Gatecoin being initially based in Hong Kong, most of our clients are high-net worth individuals, family offices and hedge funds located in Asia, looking to invest in strong Blockchain projects. By connecting the European Blockchain projects to our network of Asian investors, we have the opportunity to build a valuable bridge between the two continents.
Last but not least, Gatecoin has been founded by French expats, and we are delighted to see that France is catching up in the start-up scene, and we want to be part of this change!
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Founded in 2013 by investment bankers, Gatecoin is a bitcoin and ethereum token exchange designed for both professional traders and retail investors. Through our trading platform, we enable individuals and institutions around the world to trade and invest in a wide variety of cryptocurrencies and Blockchain assets.
Gatecoin was the first exchange to list ethereum’s token, ether (ETH) in August 2015. We were subsequently the first exchange to list ERC20 standard tokens associated with decentralized applications (dapps) built on top of ethereum and the first to provide direct participation in token generation events (TGEs) or initial coin offerings (ICOs).
We continue to support the most promising Blockchain-based projects, acting as a global gateway to decentralized applications.
We have now 50 employees in Hong Kong, and we recently decided to set-up an office in Europe. We decided to locate it in France for the several reasons abovementioned in the article.
