In a world where digital financial systems are rapidly evolving, national policies have begun to intersect with cryptocurrency innovation. This shift is evident in France, where the National Assembly is making strategic moves to redefine their approach to digital currencies. Their actions could serve as a blueprint for how national governments engage with digital assets like Bitcoin and stablecoins, influencing both fiscal policy and global cryptocurrency markets.
France’s Strategic Approach to Digital Currency: Embracing Bitcoin and Euro Stablecoins
The Call for a National Bitcoin Reserve
France’s legislative body is proposing the establishment of a national Bitcoin reserve, reflecting a bold step in integrating digital currencies into national economic strategies. The proposed reserve aims to accumulate approximately 2% of Bitcoin’s total supply, equating to about 420,000 BTC over a period of seven to eight years. This initiative suggests several funding methods, such as utilizing surplus energy for Bitcoin mining, holding onto seized Bitcoins, and allocating a portion of Livret A and LDDS savings to routine Bitcoin purchases. Additionally, the proposal includes allowing tax payments via Bitcoin, pending constitutional approval. Proponents are wary of a fully centralized digital currency, fearing excessive government control reminiscent of China’s digital yuan.
Concerns Over a Digital Euro
Critics of a central digital euro express concerns about potential repercussions on the traditional banking sector. The ability to transfer deposits directly to the European Central Bank (ECB) could destabilize banks, posing systemic risks. Although the ECB began preparations in November 2023, the introduction of a digital euro is not expected until 2029, as stated by Piero Cipollone.
Promoting Euro Stablecoins and Market Expansion
The French National Assembly also seeks to empower euro-denominated stablecoins to decrease reliance on dollar-pegged tokens. Current IMF statistics reveal that dollar-backed stablecoins dominate 91% of the $230 billion market, leaving euro stablecoins trailing with a market cap of around $259 million. The assembly urges modifications to MiCA regulations to simplify euro token issuance by European banks and enterprises, fostering a more balanced financial ecosystem.
Revisiting Banking Regulations
The legislative proposal includes recommendations to ease Basel prudential standards, which currently categorize certain crypto-backed loans as high-risk with capital requirements of up to 1,250%. Revisions are sought to encourage crypto-based lending by banks, allowing for a strategic deviation from overly stringent rules.
France’s stance on cryptocurrencies is proactive, evidenced by the AMF’s approval of BPCE’s Hexarq for custody and trading, and the authorization of the tokenized equity platform, Lise, under the DLT Pilot Regime. Chainalysis reports that from July 2024 to June 2025, France managed about $180 billion in crypto transactions, marking it as a major hub in Europe.
This proposal, while awaiting legal and political scrutiny, signifies France’s ambition to mold the trajectory of digital currencies within Europe, potentially setting a precedent for other nations.
Is investing in Bitcoin a wise decision for France?
Investing in Bitcoin may offer France a hedge against inflation and a progressive step towards integrating digital currencies into national reserves. However, like any investment, it requires diligent risk assessment and consideration of market volatility.
How does the proposed Bitcoin reserve impact the global crypto market?
If France establishes a national Bitcoin reserve, it could signal increased institutional acceptance, potentially driving up Bitcoin’s value and influencing other nations to consider similar strategies.
What are euro-denominated stablecoins, and why are they important?
Euro-denominated stablecoins are digital currencies pegged to the euro. They are crucial for diversifying the stablecoin market, reducing reliance on dollar-pegged tokens, and supporting the euro’s position in the digital economy.
How could changes to Basel regulations benefit banks dealing with crypto?
Easing Basel regulations for crypto-backed loans could make it easier for banks to engage in crypto-collateral lending, potentially increasing their involvement in the crypto market and fostering innovation in financial services.
