Hello and welcome to CFTE’s Fintech Shot – a curated newsletter about what matters in Fintech!
Amidst your busy week of re-fueling and food stocking give yourself a 5-minute break to take a look back at the biggest developments in Fintech. Here’s what we’ll cover today:
- The Chinese say bye-bye to crypto
- The French say bonjour to tech
China Bans Crypto (déjà vu?)
We can’t say that we didn’t see it coming…China’s cryptocurrency ban is a move that follows a slew of initiatives to tighten regulation for big tech and fintech by the nation’s Watchdogs.
But this time China has come down hard on the cryptocurrency ecosystem, with the democratic republic’s Central Bank announcing on Friday that all digital currency activities are illegal.
Essentially this means that ‘services offering trading, order matching, token issuance and derivatives for virtual currencies are strictly prohibited. Overseas crypto exchanges providing services in mainland China are also illegal’, the PBOC said.
‘Why??’ you may ask..
The world’s fastest-growing emerging economy cited the move to be one that comes after concerns around ‘national security’ and the ‘safety of people’s assets’. The volatile digital coin can undermine their control of the financial and monetary systems and increase systemic risk – which this world-leading economy cannot afford.
China’s Long Rivalry with Crypto
This is not the first time China has cracked down on cryptocurrencies and Bitcoin. In 2013 Banks were banned from handling Bitcoin and in 2017, the Initial Coin Offering ceased to be legal.
- China, the country that is home to one of the most advanced Central Bank Digital Currency (CBDC) projects, will have more control over digital currencies with the Digital Yuan now fully in charge.
- Though this move is bad news for the world’s beloved digital coin, Bitcoin, as slumped 8% in the light of the announcement, falling to about $41,000 on the day- the currency has always managed to bounce back after regulatory pushback, and we don’t think this time would be any different.
France is the 3rd Hottest Hub for Fintech Investments
Overtaking the Nordics in Fintech investments, the French are in for a celebration!
France’s efforts to emerge as Europe’s fintech Hub are taking shape as the country’s Fintech funding reaches €2bn already this year, just behind the UK and Germany. The amount is almost 2x times the amount raised in 2020.
How did France rise up the leaderboard?
- Government initiatives – French Politicians are on a mission to make the country a startup nation with generous funding and support for attracting talent with tech visas.
- A downpour of mega-rounds – France rose to the top of the funding table with multiple mega-rounds over $100M which included – Peer-to-peer payments platform Lydia ($131M), insurtech Alan ($223M), and crypto wallet Ledger ($380M).
- Growing ecosystem -The French ecosystem has been successful in attracting businesses from abroad to set up shop in the country.
CFTE’s Expert’s View
Claire Calemejane, CFTE’s Expert and Senior Lecturer on the course ‘Open banking and Platforms in Finance Specialisation’ says that the French government has been instrumental in making France an attractive fintech hub by investing heavily in making Paris a disruptive financial hub with a friendly regulator.
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