Following Brexit, some politicians in France have proposed Frexit, the hypothetical French withdrawal from the European Union (EU). With the French presidential election approaching, talks of Frexit have intensified and some believe that France leaving the EU could boost the price of bitcoin to “beyond record levels”.
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The Euro is ‘a Deadweight’
Frexit has been proposed by a number of French politicians during the 2017 presidential elections, including presidential candidate Marine Le Pen. She said:
The euro has protected no one, quite the contrary. The euro has been a deadweight for prices, a deadweight for jobs, a deadweight for the competitiveness of our businesses and it would be much simpler to kick-start the economy without this common currency.
On Sunday, May 7, the French people will cast their final vote in the country’s presidential election. Two candidates remain out of 11 from the first round; Le Pen and Emmanuel Macron.
The far-right Le Pen is in favor of Frexit. She wants to replace the euro with a basket of new national currencies, and even considers capital controls. Her opponent, Macron, is a centrist who is in favor reforming the EU to avoid Frexit.
Le Pen has reportedly spoken against Bitcoin to the point of suggesting banning the cryptocurrency. Macron, however, supports experimentation and the use of blockchain technology.
Frexit Could Boost Bitcoin’s Price
The effect of Frexit on Bitcoin could bear a resemblance to how Brexit affects the digital currency after Britain voted to leave the EU in June last year. “Brexit offers an opportunity for the UK to become a hub for cryptocurrencies if it tries to reposition itself as an innovation economy,” Bob Swarup, a principal at Camdor Global Advisors, told The Telegraph.
With the upcoming election, France’s future looks uncertain, similar to Brexit and Trump’s victory in the U.S., according to European Bitcoin startup Bitwala. “If the situation feels a little bit like a deja vu, this is because it is.”
The startup noted that “the price of bitcoin experienced a 25% hike from the day before Brexit to the next,” adding that:
The uncertainty regarding the value of Euro and Franc would increase demand in the cryptocurrency the following day of the Frexit referendum.
Operating in over 120 countries with over 20 currencies, Bitwala claims to have over 25,000 users. The company offers remittance services using Bitcoin.
“Hundreds of thousands of workers and immigrants currently residing in France are sending billions across borders to support their families with remittances,” the startup detailed. “Percentage of deposits and money transfer fees could eat directly into the savings of many affected families.”
Bitcoin “could play a vital role upon the possible withdrawal of France’s withdrawal from the European Union and the reintroduction of the Franc,” Bitwala believes, adding that:
If France does pull a Frexit, Bitcoin will experience a surge beyond record levels in terms of price.
Do you think Frexit will happen and how will it affect the price of bitcoin? Let us know in the comments section below.
Images courtesy of Shutterstock and Bitwala
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