Blockchain & Crypto: France has talent, but no money

Credit: Pixabay – Chris Sprotte

Tomorrow the France a " blockchain nation "? To bring up startups and perhaps future unicorns, the regulatory framework is not the first obstacle. For entrepreneurs present at EthCC 2020, the sinews of war are capital, mainly in the US.

Bpifrance assured it at the end of last year at the Blockchain Paris conference, the France has no shortage of assets in this sector. Some indicators to illustrate this: more than 200 blockchain projects in progress and 120 million euros raised by startups.

It’s a start, but still "too shy", recognized the blockchain pilot within Bpifrance, Ivan de Lastours. For the co-founder and managing director of Blockchain Partner, Alexander Stashchenko, however, it is essential to act if the France one day wants to find its place in the ecosystem blockchain.

In France, it has been considered for 4 to 5 years that cryptocurrencies it was terrorism at best, at worst what washes the planet and was going to destroy it, "he said in the 2020 edition of EthCC.

And if an inflection has occurred, it is however essentially a reaction to the project Facebook Libra, slice the leader. "As long as we consider investing in a risky area only when everyone has already done so, or globally when it is no longer risky, we will remain in the reaction not in action" regrets Alexandre Stachtchenko, who calls for more voluntarism.

Not all entrepreneurs in the industry share this "pessimism", like Thibaut Sahaghian, co-founder and CEO of Multis, publisher of a self-custody crypto-wallet.

We started the business in San Francisco and we made the choice to come back France for the simple reason that we want to create jobs in France, "he said, highlighting in particular the quality of French engineering schools, expertise in cryptography and accounting standards.

The challenge for France is not so much to resist American or other domination. The challenge is to take advantage of this new technology and allow entrepreneurs to create jobs here, ”he added.

Moreover, according to the leader of Multis, regulation is not today an obstacle to the creation of blockchain startups in France. The main obstacle, as is often the case in the technological world, funding.

For William O’Rorke, lawyer within the firm ORWL Lawyers, the regulatory framework is there for certain activities, such as conservation on behalf of third parties and buy-sell of crypto-to-Fiat. This framework is explained by greater risks, in particular the risks linked to money laundering.

A whole other range of activities, including investment counseling, trading crypto for crypto, putting aside NFTs, are subject to optional licensing. This is an honestly courageous choice on the part of the public authorities, "said the lawyer, judging France" fairly favorable to the creation of a business. "

When you create a startup, you can pay very little tax at the start, receive help from the country and you are in a stable legal environment in terms of cryptos (…) On the other hand, relations with banks are more complicated, ”he detailed.

But if startups ultimately choose the United States for their creation, it is mainly due to the availability of capital. Multis benefited from the services of an accelerator in California, which required it to create a company domiciled in Delaware.

The big difference of the United States compared to France is not at all linked to the regulatory framework, but just to the funding. In California, it is possible to raise 100,000 dollars by presenting a prototype. For the same amount in France, we were asked for a business model with a five-year projection, ”says Thibaut Sahaghian.

The entrepreneur also insists on a greater understanding of cryptocurrencies and the decentralized finance (DeFi). On the other hand, in France, public authorities and investors tend to focus on Bitcoin.

The funding would therefore constitute the brake on the development of blockchain startups in France, even if the founder of the crypto-wallet observes with satisfaction the involvement of the BPI.

Alex Masmej of MetaCartel also stresses the importance of capital in the United States.

I launched my project last month and at least a dozen investors have contacted me, including none in Europe. Why then launch my business in Europe? It’s not just France, but Europe that has a lack of ambition, ”he concluded.