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 sector is collapsing.

In the digital world, NFTs generate a lot of debate. New digital Eldorado for some, spectacular gogo-catcher for others, opinions vary. As a reminder, NFT is the acronym for Non-Fungible Token – or “non-fungible Token” in French. It is a type of certificate of authenticity based mainly on the Ethereum blockchain – an exchange protocol that uses a technology for storing and transmitting data in the form of blocks linked to each other, without any central authority or intermediary, which makes profit possible in transparency, security and speed – and that gives a monetary value to a commodity – physical or digital. NFTs attached to a physical good or a digital work are considered to be immutable, that is, irreplaceable, secure, harmless and easily transferable to a third party. Their value – and therefore that of the property to which they are attached – is quite volatile and unstable (see our Data sheet). Some NFTs have traded for astronomical sums, ranging up to tens of millions of dollars. But luck can turn quickly.

The government obviously has faith in this technology, as evidenced by the recent statements of Jean-Noël Barrot, Delegate Minister for Digital Transition. On October 18, 2022, during the opening of the NFT Factory – a 400 m² space that aims to introduce the general public to NFTs and develop the French ecosystem of non-fungible tokens by supporting start-ups entering the domain – the Minister declared. that France had “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 very badly timed announcement…

NFT and public funds: supporting the French market through taxes

As reported FOMJean-Noël Barrot announced the state’s desire 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 did not indicate the exact amount of this funding, it would be provided according to France 2030an investment plan of 30 billion euros set in 5 years which should facilitate the show “Tomorrow’s Next Tech Champions”. However, she considers it absolutely necessary to put in place “a regulatory framework for NFTs, still unidentified objects, especially in terms of legal certainty”. In fact, NFTs are currently completely exempt from French legislation. On the side of the European legislation MiCA – Market of crypto assets –, NFTs are only adapted if they are related to a material work. Also, all digital creations – and there are many – are in a legal vacuum.

In an interview for specialized media The Great Whalepublished on October 19, Jean-Noël Barrot gave a little more detail, announcing that he had entered, with Bruno Le Maire and Gabriel Attal – respectively Minister of Economy and Minister of Action and Public Accounts – in the General Inspectorate of Finance. “A global mission for NFTs. In particular, it will draw up an overview of uses and may suggest ways to change regulations in order to allow the development of players in the sector,” he explains. He refuses to be “In the camp of fear” that this new object may awaken, but rather in that of ambition, so that “acquiring the technological bricks of web 3 in order not to be dependent on foreign powers, because technological dominance precedes economic and cultural dominance”.

NFTs 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 possible time. Indeed, the NFT sector is currently in the red – although brands and companies continue to show interest – following the cryptocurrency crash. Even the most famous collections, such as Bored Ape Yacht Club by Yuga Labs, have lost their value considerably. This is explained by the fact that in 2022, token exchanges on the blockchain have been greatly reduced. According to analysts at StockApps, NFT sales fell by 41% between the last half of 2021 and the second quarter of 2022. Inflation and the resulting economic crisis are not unrelated and are forcing investors away from high-risk assets, such as cryptocurrencies and NFTs, which do not represent anything concrete. The NFT of the first tweet, which was initially sold for $2.8 million, only found takers in April 2022. for the amount of 280 dollars

© Yuga Labs

In any case, this is not what will undoubtedly worry the Ministerial Delegate for Digital Transition and his advisers. To stay positive, note that despite the collapse of the speculative market, projects are multiplying. eBay, the leader in online auctions, launched its own immutable token market in spring 2022. Coca-Cola and Nike also launched their own collection of NFTs. What about Facebook, which onlyopens its social network of over 2.9 billion users worldwide to immutable tokens, in parallel with the Apple App Store! It is therefore a bold and risky bet that the French government is undertaking…

Leave a Comment