The French at the forefront of the crypto and NFT revolution
While China completes its digital yuan and the United States actively works to do the same for the dollar, the European Central Bank is taking its time. Its dematerialized euro isn’t supposed to see the light of day until 2025. Without waiting, start-up Angle Labs kept it going by launching a euro- and blockchain-based “stablecoin” last November. The two founders, Pablo Veyrat and Guillaume Nerfvo, both from Polytechnic and Stanford University, immediately attracted attention, raising 5 million euros from international venture capital funds.
A stablecoin, for the uninitiated, is a digital replica of an existing currency whose value is guaranteed, regardless of changes in exchange rates. In other words, it is a stable cryptocurrency, based on an underlying physical asset. This financial product illustrates the proliferation of French initiatives in what is commonly called fintech. “It’s crowded! A lot of companies are being created right now, but they’re still under the radar, explains Frédéric Montagnon, one of the French blockchain pioneers. We have a very strong competitive advantage with our engineers, who are very good at mathematics and finance. Those who left yesterday in New York, London or Hong Kong they are now setting up their projects.”
There is a revolution underway that we are still struggling to fully grasp. Because behind the concept of blockchain, cryptocurrency, NFT (non-fungible token) or Web3, a new internet philosophy is born. An open source decentralized network (platforms and technologies are free to access) where users, individuals and companies take back control of their data.
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“The philosophy is to transform into the common good what Gafam has captured,” continues Frédéric Mongagnon. Example: today, the owner of a Facebook account cannot recover the data of his followers in order to transfer them to another platform. It is Facebook that keeps this treasure. In Web3, on the contrary, everyone owns their data. Potentially, this revolution heralds the collapse of the first social network, which by changing its name (now Meta) also wanted to send an encouraging message to the markets.
The world of banking and insurance also has serious concerns. Blockchain makes it possible to perform many banking services without intermediaries (Visa card, banks), instantly and securely. In the United States, the cryptocurrency exchange Coinbase, created ten years ago, already has a market capitalization of 33 billion euros. BNP Paribas bicentennial, the first bank in the euro zone, worth 58.
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In France, it is the Ledger unicorn, valued at 1.5 billion, that is the leader in this new finance. Founded in 2014, it designs and manages crypto-asset portfolios for individuals and about a hundred companies… 85% abroad. Its flagship product, the Ledger Nano, which sells several million units each year, allows you to store your assets on a kind of ultra-secure USB key. The cryptoasset’s capitalization is estimated at nearly $2 trillion, suggesting significant potential for Ledger to underwrite 15% of all cryptocurrencies in the world. “The growth well ahead of us is phenomenal, confides its CEO Pascal Gauthier. We are in a time similar to 1998, when the number of Internet users was only 300 million.”
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Among the rising stocks is Coinhouse, which spun off from Ledger in 2017. Initially a cryptocurrency broker, it has since opened a crypto savings account and is into payments. The ambition of its boss Nicolas Louvet: to become the first European cryptobank. Another nugget, Parisian start-up Kaiko, described as the “Bloomberg cryptocurrency,” does 50% of its business in the United States. It provides real-time cryptocurrency price and exchange rate indices from billions of transactions made every day. “Blockchain will serve the industrial applications of tomorrow’s finance, I am very convinced,” explains founder Ambre Soubiran, a former derivatives specialist at HSBC.
It is not Bpifrance who will deny it. “We have financed almost 150 blockchain and cryptocurrency start-ups with our traditional loan, grant or innovation mechanisms and we plan to increase this support,” says Ivan de Lastours, in charge of blockchain at the public bank.
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Finance is not the only sector involved. With NFTs, this authentication tool also based on blockchain, all brands are destined to use these tools. This is the belief, for example, of Pierre Nicolas Hurstel, co-founder of Arianea, a start-up that created a platform for the luxury and fashion industry, in partnership with Richemont, Ba&sh and Thierry Mugler.
An idea? Enable brands, through proof of authenticity and ownership of their products, to regain control of the counterfeit or second-hand market. It is impossible to resell a Breitling watch without NFT confirmation that you are the owner. This digital passport is also intended to certify purely virtual creations. Finally, through this NFT, brands can establish a direct dialogue with their owners, freeing themselves from Google and others. It remains to be hoped that regulators and politicians will understand the problems. “The environment is not encouraging,” laments Frédéric Montagnon.