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  • Bredhill Consulting

Cryptoactives: what future?

Does the bankruptcy of FTX, the second largest cryptocurrency exchange platform, herald the end of cryptoassets? Some think so, with this fact reinforcing their skepticism.

Yet in October 2022, the Governor of the Bank of France brought together an array of fintechs, representatives of commercial banks and the Minister of Digital Transition to ensure that France was a forerunner in this field. The Banque de France is developing pilots on Blockchain-based central bank digital currency (CBDM), France boasts of having created the status of Digital Asset Service Provider (DASP) and counting 52 statuses granted., eToro and Societe Generale have made a big splash by joining this group recently. Several neo-banks around the world are already offering to open accounts in certain cryptocurrencies, invest in these assets and even offer payment facilities. Investment banks are more than working on the subject and some have already announced to provide custody services to institutional investors, including JP Morgan whose CEO has changed his belief on these assets.

In Europe, in addition to neo-banks, Swiss private banks have started to offer this type of service to high net worth clients, relying on regulations similar to those in France and on clients who are naturally more willing.

Two regulations for digital assets will soon be adopted in Europe and the United States: MICA (Markets in Crypto-Assets), recently approved by the Council of the European Union, and structured with the same vision as the French regulation on one side of the Atlantic, and the "Framework for Responsible Development of Digital Assets" or the "Digital Assets Market Structure and Investor Protection Act" on the other side in the United States, will frame the practices and regulate the financial activities around crypto assets. This will avoid the bad practices of many projects and especially some platforms (like FTX which did not meet the rules of holding and liquidity) and will see the disappearance of many tokens or coins that do not meet the minimum rules of transparency, solvency and governance. These regulations will allow the integration of crypto assets as a new class of financial assets and why not as a new economic sector in its own right in the traditional economy.


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