French election results in hung parliament raise questions about cryptocurrency regulation

In short

• The French general election ended in a hung parliament, with no party or coalition gaining an absolute majority of votes.
• The New Popular Front, a left-wing coalition, won the most seats in parliament, with 188 seats, followed by President Macron’s Ensemble with 161 seats and Marine Le Pen’s National Rally with 141 seats.
• The lack of a majority may make it difficult to pass new laws, including those related to cryptocurrencies.
• Prime Minister Gabriel Attal is expected to resign and Macron will have to choose a new prime minister.
• The outcome could have implications for France’s domestic and international policies, including its stance on cryptocurrencies and digital assets.

The recent French general election resulted in a hung parliament. This is a rare occurrence in modern French politics, but it could have far-reaching consequences for the country’s governance, including its approach to cryptocurrency regulation.

In elections held on Sunday, the largest bloc emerged as the New Popular Front, a coalition of left-wing parties, winning 188 seats in the 577-seat National Assembly.

But that falls far short of the 289 seats needed for an outright majority. President Emmanuel Macron’s centrist Ensemble alliance won 161 seats, while Marine Le Pen’s far-right National Rally made significant gains, winning 141 seats.

This unexpected result has created a political landscape unfamiliar to France, where a clear majority in parliament typically emerges. The lack of a dominant party or coalition is likely to complicate the process of forming a new government and passing legislation.

Prime Minister Gabriel Attal, of Macron’s Renaissance party, announced his intention to resign, leaving the president with the difficult task of appointing a new prime minister who can navigate the fragmented political landscape.

The ramifications of the suspended parliament extend beyond domestic politics. Mark Foster, head of EU policy at the Crypto Council for Innovation, suggests that the new composition of parliament could make the development of domestic policy, including regulation of cryptocurrencies and digital assets, more uncertain and difficult.

France has made significant progress in the crypto space, registering 74 crypto companies last year, with expectations of reaching 100. The country has also been actively trying to attract more digital asset companies. However, the current political situation could slow or complicate these efforts.

The election results come at a key moment for cryptocurrency regulation in France and across the European Union. The EU’s Markets in Crypto Assets Regulation (MiCA) for stablecoins came into effect at the end of June, with the rest of the cryptocurrency regulations set to come into effect by the end of the year. Political uncertainty in France could potentially impact the implementation and enforcement of these regulations.

The hung parliament also raises questions about France’s influence on the international stage, particularly in the European Union and global economic forums. As the EU’s second-largest economy and a key player in international diplomacy, any political instability in France could have spillover effects beyond its borders.

For the cryptocurrency industry, this political shift in France adds another layer of complexity to an already evolving regulatory landscape. While France has been relatively welcoming to cryptocurrency companies, the new political reality could lead to a period of political uncertainty.

The election result also reflects broader trends in European politics, with traditional centrist parties losing ground to left-wing and far-right movements. This shift could affect how European nations approach new technologies and financial innovations such as cryptocurrencies.