In its advent to become a FinTech hub, the French government has given the nod for trading unlisted securities using blockchain technology under new rules.
According to a Reuters report, the government of France – through its Economic and Finance department – has issued new rules enabling banks and FinTech firms to trade unlisted securities using blockchain platforms.
The legislation is noteworthy for acknowledging blockchain as a transformative new technology to power securities trading, capable of performing instantaneous trades without the need for an overseeing clearinghouse. Securities listed through traditional centralized financial exchanges continues to be a time-consuming process laden with fees for custodians and clearing houses.
In a statement on the decentralized technology, French finance minister Bruno Le Maire said:
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.
The new rules come at a time when Paris is looking to establish itself as a FinTech destination following the UK’s Brexit by presenting itself as an attractive financial center for businesses moving away from London. Accordingly, the French government has already pledged major tax cuts (an estimated $13 billion) in payroll taxes to lure financial institutions from London.
Further, Le Marie also claimed that the new rules would be yet “another asset for Paris’ attractiveness as a financial center”, particularly in new financial technologies like blockchain.
In related news, the Banque de France, the country’s central bank, revealed its first experiment using blockchain technology with a focus on cross-border payments within the Single Euro Payments Area (SEPA). In mid-2016, the country’s first banking blockchain consortium took shape with a number of major financial institutions including Société Générale and BNP Paribas working toward developing blockchain infrastructure for small and medium-sized businesses.