Business

Erik Gibbs

French central bank warns financial institutions to stay out of crypto

It’s painfully obvious that French regulators need a few lessons on the topic of cryptocurrency. In a recently-released report by the Bank of France (BoF), officials are hoping to implement some drastic legislation that will seriously hinder the advancement of the digital currency in the country. It’s a step back for cryptocurrency, but not at all surprising from the country that thinks escargot is a viable dinner.

The BoF disseminated a report on March 5, outlining how it views cryptocurrency, and the opinion is definitely not vague. The bank said that cryptocurrencies are not money or legal tender and only serve to facilitate cyber-attacks and money laundering. It added that there is virtually no value in crypto-assets. Translated from the French report, the authors of the report argue, “The anonymity that characterizes the means of production and transfer of the majority of crypto-assets favors above all a risk of them being used to criminal ends (sold on the internet for illicit services or goods) or used to the end of money laundering and the financing of terrorism.”

The BoF goes on to indicate that it would support any action that prohibits banks, trusts and insurance companies from taking deposits or loans that have their origin in crypto. It also is pushing for a prohibition on any type of marketing that suggest crypto is a valid product for financial growth, except in certain limited instances, including marketing to only highly experienced investors. No one becomes a highly experienced investor unless they’re an inexperienced investor. It’s the whole “learn to crawl before you can walk” principle.

The next section in the report mimics what has so many banks concerned these days. The BoF said that the cryptocurrency industry has the potential to destabilize financial markets. In case the report authors missed the memo, that’s the whole idea. There seems to be a trend among a large number of banks that focuses only on saving their own assets, and not doing what is best for the community. This, as has been repeatedly demonstrated, is one of the main driving factors behind cryptocurrencies.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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