France’s finance minister, Bruno Le Maire expressed concerns this week about the use of digital currencies by terrorists, tax evaders, and money launderers. In response, he has instructed the nation’s center bank to create a new regulatory framework for digital currencies. Le Maire appointed Jean-Pierre Landau, the former deputy governor of the Bank of France, to lead a working group whose goal will be to review and regulate cryptocurrencies.
Because bitcoin transactions are anonymous, they appeal to criminals. Concerns are especially high about the potential use of bitcoin by drug traffickers. Le Maire will present the issue at the upcoming G20 Summit in Argentina. “We want a stable economy: we reject the risks of speculation and the possible financial divisions linked to bitcoin,” he announced on Monday.
Le Maire has given mixed signals about its stance on cryptocurrency. In December he authorized Blockchain-based trading of unlisted securities. Yet, the decision to appoint Landau to the task force raises flags, as his cynicism regarding bitcoin is well-known in France. He told the Financial Times that bitcoin will be the “tulip of the 21st century,” referring to the tulip mania of the 1600s, when prices of the tulip bulb in the Netherlands rose to extreme heights before suddenly collapses in one of the earliest recorded bubbles.
France has had a thriving cryptocurrency ecosystem in recent years.The country launched Europe’s first bitcoin center in 2014, La Maison du Bitcoin. It also houses the headquarters for Ledger. It will be interesting to see how these companies and the country’s bitcoin enthusiasts react to the forthcoming regulations.