the government wants to invest public funds in the market

The government would like to invest public money in NFTs to promote their development in France. An announcement that raises questions and comes at the wrong time, when the industry is collapsing.

In the digital world, NFTs generate a lot of debate. New digital eldorado for some, spectacular gogo-catcher for others, opinions differ. Recall that NFT is the acronym for Non-Fungible Token – or “non-fungible token” in French. It is a sort of certificate of authenticity based mainly on the Ethereum blockchain, an exchange protocol that uses a technology to store and transmit data in the form of blocks connected to each other, without any central body or intermediary, which allows you to gain transparency. , security and speed – and that assigns a monetary value to an asset – physical or digital. NFTs associated with a physical asset or digital work are considered non-fungible, i.e. non-interchangeable, secure, tamper-proof and easily transferable to third parties. Their value – and by extension that of the property they are associated with – is quite fluctuating and volatile (see our practical sheet). Some NFTs have been traded for astronomical sums, ranging up to tens of millions of dollars. But luck can change quickly.

The government obviously has confidence in this technology, as evidenced by the recent statements by Jean-Noël Barrot, Delegate Minister for Digital Transition. On October 18, 2022, on the occasion of the inauguration of the NFT Factory – a space of 400 square meters aimed at making NFTs known to the general public and developing the French ecosystem of non-fungible tokens by supporting start-ups that embark on the domain – the Minister thus declared that he had France “all the assets to become a European and global NFT platform”. “We must accompany this movement with the support of public money, within the framework of France 2030”, He added. A badly timed ad …

NFT and public funds: supporting the French market through taxes

As BFM reports, Jean-Noël Barrot announced the will of the state to finance the sector with public funds: “With global players in culture, video games and the luxury industry, France has everything it needs to become a European and global platform for NFTs. We must accompany this movement with the support of ‘public money’.. Although he has not indicated the exact amount of this loan, it would be foreseen as part of France 2030, an investment plan of 30 billion euros distributed over 5 years that should facilitate the emergency. “future technological champions of tomorrow”. However, he deems it absolutely necessary to put in place “a regulatory framework for NFTs, still unidentified objects, particularly in terms of legal certainty”. Indeed, NFTs are currently totally exempt from French legislation. As part of the European MiCA – Market in crypto asset – regulation, NFTs are framed only if linked to a material work. Furthermore, all digital creations – and there are many of them – are in a legal vacuum.

In an interview with the specialized media The Big Whale, published on October 19, Jean-Noël Barrot gave some more details, announcing that he has entered, with Bruno Le Maire and Gabriel Attal – respectively Minister of Economy and Minister of Action and Public Accounts – Inspectorate General of Finance “a global mission on NFTs. In particular, it will elaborate an overview of the uses and could suggest ways of modifying the regulations in order to allow the development of the players in the sector”, He explains. She refuses to be “in the field of fear” that this new object may arouse, but rather in that of ambition, to do so “mastering the technological bricks of the web 3 so as not to depend on foreign powers, because the technological domain precedes the economic and cultural domain”.

NFT and public funds: an investment that comes at the wrong time

The least we can say is that Jean-Noël Barrot’s announcement comes at the worst moment. In fact, the NFT sector is currently in the red – although brands and companies continue to show interest – after the cryptocurrency crash. Even the most famous collections, such as Yuga Labs’ Bored Ape Yacht Club, have significantly lost their value. This is explained by the fact that in 2022, token exchanges on the blockchain were significantly reduced. According to analysts at StockApps, NFT sales fell by 41% between the latter half of 2021 and the second quarter of 2022. Inflation and the resulting economic crisis are no stranger to this and are forcing investors to hijack assets. too risky, such as cryptocurrencies and NFTs, which represent nothing concrete. The NFT of the first tweet, initially sold for $ 2.8 million, was only sold in April 2022 for $ 280 …

© Yuga Labs

In any case, this is obviously not what will worry the Minister Delegate for Digital Transition and his advisers. To remain positive, note that, despite the speculative market crash, the projects are multiplying. eBay, a leader in online auctions, opened its non-fungible token market in the spring of 2022. Coca-Cola and Nike also launched their own NFT collection. And what about Facebook, which has just opened its social network of over 2.9 billion users worldwide to non-fungible tokens, along with the Apple App Store! It is therefore with a risky and risky bet that the French government embarks …

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