A state-owned financial institution in France has announced plans to invest 25 million euros (approximately $27 million) in cryptocurrencies that bolster local cryptocurrency and blockchain initiatives.
In a press release dated March 27, the institution declared its intention to support newly established projects with a notable presence in France. In exchange for its investments, it will receive tokens and aims to fund areas such as decentralized finance (DeFi), staking, tokenization, and artificial intelligence.
The initiative, backed by the French Ministry of Economy and Finance, aims to “foster emerging technologies and enhance the French blockchain ecosystem.”
While the global blockchain landscape is flourishing, the participation of French funds remains relatively scarce, according to the statement.
The French Minister for Digital and AI, Clara Chappaz, remarked that a combination of public and private financing is “crucial for sustaining our ecosystem’s position on the international stage.”
The deputy CEO of the financial institution, Arnaud Caudoux, expressed confidence in the increasing significance of blockchain companies in the coming years, aiming to elevate France’s competitiveness and presence in the digital assets sector.
“With the US rapidly advancing its own crypto strategy, this is even more vital,” Caudoux noted during a press conference, adding that the institution had begun its support for cryptocurrencies prior to the US’s recent pro-crypto initiatives.
The headquarters of the financial institution in Paris. Source: Google
The institution has been an active supporter of the blockchain sector for the past decade, having invested over 150 million euros ($162 million), including financing the crypto hardware wallet company Ledger back in 2014.
In 2022, it began exploring limited investments through tokens, including a partnership with the DeFi lending platform Morpho to acquire its token. This token has since burgeoned into the 12th largest protocol by value, currently at $3.24 billion, according to DefiLlama.
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Venture capitalists frequently engage in investments that are compensated through tokens, with PitchBook forecasting that crypto VC deals will exceed $18 billion this year, a notable rise from the $13.6 billion raised last year.
Generally, when a crypto platform launches a token, it allocates a segment of its supply to investors with varying lockup periods during which the tokens cannot be sold.
A portion of the token supply is often immediately distributed to selected public users to generate liquidity, which may lead to a decline in token values if these users decide to cash out.
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