Crypto-currency: towards a revival of associative financing?

Crypto-currency: towards a revival of associative financing?

The development of DeFi (Decentralized Finance)[1] allowed the emergence of a new mode of financing favorable to associations and foundations.

Since 2009, crypto-assets have been able to seduce companies because they constitute alternative financing. NPOs (non-profit organizations) inexorably seeking funding have imposed themselves on the question. Unfortunately, due to the fiscal vagueness present in France regarding the taxation of cryptos, a certain reluctance takes hold of these structures.

The trend is maintained towards the democratization of this still too heterodox form of financing. Pedagogical tools on the subject are legion and encourage to take the subject head on, especially when the search for financing is crucial.

NPOs would have everything to gain from taking an interest in the issue when nearly 8% of French people hold crypto-assets. 30% even say they are ready to embark on this new form of investment. The public is there, waiting to be reached out or called upon.[2]

It is often in the face of crisis situations that humans give free rein to their inventiveness. Thus, in the conflict between Ukraine and Russia, Crypto Fund of Ukraine, in one week, raised 50 million euros in crypto-assets in favor of Ukraine. In an unprecedented way, crypto-assets have therefore emerged as an emergency funding method initiated by citizens around the world.[3]

But beyond the opportunity of this tool in a context of crisis, we must be aware of the extent that this phenomenon can take in a relatively peaceful context. In the case of the financing of NPOs, it is a safe bet that crypto-assets will shine in a new role as catalysts for modern methods of financing.

Few French NPOs currently use this system. Indeed, it is necessary to make available to the public during the AGP (call for the liberality of the public)[4]wallet addresses for receiving crypto-donations, which may still seem a little too technical both for some NPOs and for the donor himself.

“In domestic law, if no legal obstacle materially prevents associations from issuing a tax receipt allowing the donor of crypto-assets to access the right to tax reduction under sponsorship, to date, there is It would seem that no organism has yet been freed from it. »[5]

It is perhaps here that the shoe pinches. Indeed, donation campaigns work because individuals or companies can benefit from a tax deduction (66% for individuals (article 200 of the CGI); 60% for companies up to 0.5% of the turnover. business (article 238 of the CGI)). The administration does not seem to have validated this system for crypto-donations, so the interest remains clearly limited for donors.

Nevertheless, the simple and pure donation, without tax deduction is always possible. From an emotional point of view, it can encourage the donor taken in his individuality to participate in the development of the crypto yet so decried and promote the era of progress. But don’t dream too much…

The rise of crypto-assets even makes it possible to rethink crowdfunding through the Initial Coin Offer (ICO): “These offers to the public of coherent digital assets, for a project leader, to issue a ‘token’ through of a blockchain, which is offered for purchase in presale. To this end, the token encapsulates, among several other functionalities, an access right to the product or service that the fundraiser is used to finance. »[6]

But this system deserves to be more childish and more educational.

In short, vigilance in this area is required. The tax administration will decide one day or another on the subject and NPOs could in this way take advantage of this financing alternative.

[1] See with profit: https://www.forbes.fr/finance/credefi-comment-la-finance-decentralisee-defi-peut-elle-liberer-la-finance-traditionnelle/

[2] Study by the ADAN association: https://adan.eu; v. Adan, KPMG, “Crypto in France: structuring of the sector and adoption by the general public”, Feb. 2022.

[3] Juris associations 2022, n°670, p.33, Associative financing by crypto-assets in the Russian-Ukrainian conflict, Hugo Bordet

[4] See the guide to appealing to the generosity of the public: https://www.associations.gouv.fr/le-guide-de-l-appel-a-la-generosite-du-public.html

[5] Juris associations 2022, n°670, p.16, Tribune: “Crypto-assets and associative financing: a new form of support to be seized”, Hugo Bordet, Colas Amblard

[6] Juris associations 2022, n°670, p.17, Initial coin offering: crowdfunding 3.0? Marina porter