French Government Greenlights Blockchain

New rules permit crypto-tech unlisted security trading, cuts out middlemen. 

Of all places, France has given blockchain its blessing.

According to Reuters, the French government has allowed unlisted security trading via the digital currency technology with the adoption of new rules to help bolster the highly regulated country’s image as a financial innovation center.

Cutting out middlemen such as custodian banks and brokers, the new rules allow banks and fintech companies to set up blockchain platforms for instant unlisted security trading. Listed securities, however, will still need to pass through clearinghouses and custodians.

“The use of this new technology will allow fintech firms and other financial actors to develop new ways of trading securities that are faster, cheaper, more transparent, and safer,” Finance Minister Bruno Le Maire said in a statement.

Last month, Paris-based asset management firm TOBAM opened its Bitcoin mutual fund, the first of its kind in Europe. The fund allows for qualified investors to gain exposure to cryptocurrency in a safer, more convenient vehicle backed with TOBAM’s cybersecurity.

“Because a fund is organized with segregation of duties in terms of custody, in terms of valuation, [and] in terms of management, you have [an] auditor which audits not only the valuation in the accounts, but also the structure of the organization,” TOBAM President Yves Choueifaty told CIO in an exclusive interview.  “The best in terms of holding assets is probably via funds, and this was missing for the Bitcoin in a highly regulated country, and we have been able to launch that in a highly regulated country—probably the most regulated country in the world—which is France.”

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