France to create legal framework for cryptocurrency offerings

An Initial Coin Offering involves a company raising funds by offering investors tokens in return for their cash or cryptocurrency such as bitcoin, as opposed to obtaining shares in the company from a traditional offering. (Reuters)
Updated 22 March 2018
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France to create legal framework for cryptocurrency offerings

PARIS: France plans to create a legal framework for raising funds via cryptocurrencies and aims to become a leading center for offerings in bitcoin-style digital currencies, its finance minister wrote on a news website.
In an opinion piece on French website Numerama, Bruno Le Maire wrote that he had asked former central bank official Jean-Pierre Landau to draft a proposal for a legislative framework for digital currencies.
“France has every interest in becoming the first major financial center to propose an ad-hoc legislative framework for companies making an Initial Coin Offering,” Le Maire wrote.
An ICO involves a company raising funds by offering investors tokens in return for their cash or cryptocurrency such as bitcoin, as opposed to obtaining shares in the company from a traditional offering.
Le Maire said that an action plan to be presented to the French government in a few weeks will propose giving French market regulator Autorité des marchés financiers (AMF) the option to authorize companies to issue “tokens” to raise funds, as long as they respect certain criteria to protect investors.
“This ‘white list’ will provide a precious reference for investors who want to finance serious projects,” he wrote.
Le Maire said that blockchain will offer unprecedented opportunities for French startups to raise funds by issuing tokens in Initial Coin Offerings.
“This promises to create a network of confidence without intermediaries, offers increased traceability and will boost economic efficiency,” Le Maire wrote.
Le Maire said France has a tradition of financial innovation and had created a legal framework for crowdfunding in 2014, had become a leader in green finance and had legalized the use of blockchain for the transfer of securities in December last year.
“Our target is simple: enter into the world of finance of the 21st century by guaranteeing all players the necessary security for their development ... we should not miss out on the blockchain revolution,” Le Maire wrote.
Finance ministers and central bankers from the world’s 20 largest economies meeting in Buenos Aires this week asked regulators to monitor cryptocurrencies but stopped short of proposing any specific action.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 14 min 51 sec ago
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.