Friday, 20 April 2018

France to allow blockchain for trading

France’s finance minister on Friday unveiled a decree that would make it the first nation in Europe to allow the trading of some non-listed securities using the blockchain technology that underpins cryptocurrencies.
The decree, presented by French Minister of the Economy and Finance Bruno Le Maire to the government, should enter into force by July next year at the latest and would apply to non-listed financial securities that EU law does not require to be traded via an intermediary, a market worth potentially more than 3 trillion euros (US$3.5 trillion).
In particular, this includes shares in mutual and hedge funds, negotiable debt securities and unlisted stocks and bonds.
Blockchain technology debuted in 2009 as a public, encrypted ledger for the digital currency bitcoin.
It has drawn interest from the established financial sector in recent years because of its potential for securely tracking transactions, allowing anyone to get an accurate accounting of money, property or other assets.
Blockchains record transactions as “blocks” that are updated in real time on a digitized ledger that can be read from anywhere and does not have a central record keeper. It is considered to be secure, as all changes should be made simultaneously among all users.
“The use of this technology will permit fintechs and other financial actors to offer new solutions for exchanging securities, solutions that are faster, cheaper, more transparent and more secure,” Le Maire told journalists.
Fintechs are start-ups trying to shake up the financial sector via the introduction of new technology.
Le Maire said the decree “is a way of telling firms: ‘Come do live tests here, in a secure legal framework.’”
Becoming the first in Europe to authorize blockchain trading would increase the attractiveness of Paris for fintechs and encourage innovation, he added.
Separately, South Korea is studying ways to regulate speculative trading in cryptocurrencies as the latest surge in prices stokes a craze over bitcoins.
The South Korean Financial Supervisory Service on Friday said that it has ruled out using bitcoin for derivative products.
The decision effectively bans investing in bitcoin futures that are to start trading on the Chicago Board Options Exchange this weekend.
Earlier this week, the South Korean Ministry of Justice said it would consider ways to regulate cryptocurrency exchanges and plans to devise stiff penalties for crimes related to such transactions.
It is part of a backlash against digital currencies in some Asian countries, even as Japan embraces their use.
Bank Indonesia spokesman Agusman Zainal on Friday said the central bank would issue a rule prohibiting the use of bitcoin as a means of payment by next year.
At the moment, it is reviewing the situation, he said.
The price of bitcoin surged more than 20 percent overnight to top US$17,000 before falling back to US$15,418.19 late on Friday. One bitcoin was worth less than US$1,000 at the start of the year.

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