AMF Study Shows Slow Global Adoption Rate for ICOs

Nov 15, 2018 at 22:15

AMF (l’Autorité des marchés financiers) has released a study which found that global adoption of initial coin offerings (ICOs) as a scheme to finance businesses is slow.

“The AMF study shows the following global trends: this method of financing is still marginal, representing a total of 19.4 billion euros since 2014 with an acceleration over the last two years, mainly in 2017 and during the first three quarters of 2018 (respectively 5.6 and 13.4 billion euros),” read a report summary published Nov. 14.

In all, the United States accounted for the lion’s share of ICOs launched during the period. France’s ICOs, on the other hand, accounted for a “modest share” of this type of financing, generating about $100 million via 15 ICOs. This is equivalent to only 1.6% of the total.

AMF affirmed that ICOs helped small companies to preserve the integrity of their capital and that the local ICO projects also helped other industries to raise money.

Other findings showed that ICOs are considered by small companies in order to develop a community of committed investors or to preserve the integrity of their capital.

Meanwhile, future projects are geared to diversify into other sectors with the hopes of raking in between 1 and 180 million euros.

“Most of the upcoming ICO projects have already raised funds through traditional funding channels,” AMF said in the study.

The study also aimed to examine the enablers of an ICO project and leaders see the need to put in place robust anti-money laundering procedures and transparency.

“This last element, confirmed by the analysis of the recent economic literature, demonstrates the need for appropriate regulation,” AMF said.

On the local front, the study noted that France’s legislative body is reviewing a framework that will improve investor protection while allowing the development of innovative projects in France.

“Given the cross-border nature of these projects, the diversity of regulatory approaches at the international level is a point of vigilance. In this context, international and European cooperation is essential in order to identify fraud and put in place a coherent regulatory framework,” it added.