Emmanuel Macron, the President of the French Republic, recently proposed raising the legal retirement age from 62 to 64, but the French people are refusing: in this delicate situation, could crypto assets be the right solution? The following are the details.
Summary
Macron, pension reform and crypto assets
After rejecting two censure motions, the French parliament approved pension reform on 16 March. In addition to moving the legal retirement age, the new law consolidates the 42 special pension schemes into a single point system.
The goal, according to the Elysée, would be to facilitate professional transitions and career breaks. However, the pension reform penalizes people with difficult or precarious jobs.
Hence, while the unions are calling on Emmanuel Macron to launch a citizens’ consultation on pension reform, the situation seems hopeless. In any case, for the government this reform is a necessary evil to rebalance the state coffers.
In fact, according to Bruno Le Maire, this reform is expected to bring 17.7 billion euros to pension funds by 2030. On the other hand, support measures to ease the transition to the new pension system are expected to cost the French government 4.2 billion euros.
In all this, some investment funds, including Vanguard, have turned their backs on Bitcoin and thus the entire crypto sector, which others say could be instead be the very solution to the pension problem.
However, others still see the blockchain sector as a hedge against currency depreciation that directly affects pensioners.
Why might crypto assets be the potential solution to the problem?
Considering that, on average, retirees receive a pension of 1,400 euros net per month, and taking into account the annual inflation rate of 3%, retirees would need about 1,721 euros per month to maintain the same standard of living by 2030.
In addition, they would also need 3,109 euros per month to hope to get out of it by 2050.
It is important to note that this forecast is based on raw data from the European Union Commission and the ECB
In contrast, Bitcoin has increased by more than 70% since the end of December. In fact, Satoshi Nakamoto’s crypto has risen from just under $16,600 on 1 January to over $28,200 at the moment.
One of Bitcoin’s biggest supporters, Michael Saylor, thinks it is the world’s best safe haven. Not surprisingly, MicroStrategy, the company he heads, recently purchased another 1,045 BTC.
With this latest purchase, the company brings its reserves to over 140,000 BTC. As a reminder, MicroStrategy was one of the first US companies to offer cryptocurrency shares to employees.
How Macron’s France could solve its pension problem with crypto
As we know, in the United States, some pension funds have begun offering crypto investments to their clients. For example, Fidelity wants to allow its clients to incorporate Bitcoin into their 401(k) plans (a private retirement plan that allows Americans to contribute to a retirement savings account) by the end of 2023.
As such, these will be able to invest up to 20% of their 401(k) funds in Bitcoin. It is worth mentioning that the Boston-based investment fund manages the pensions of about 23,000 companies.
Therefore, some experts see the pension reform in France as an opportunity to promote the adoption of Bitcoin and the entire crypto industry in general.
They also argue that the issue could even encourage other pension funds to follow in the footsteps of Fidelity Investments and ForUsAll, two of the largest pension funds in the United States.
According to entrepreneur Del Crxpto, the French could retire at age 62 by converting their contributions into Bitcoin for the next five years. According to some specialists, the depreciation of fiat currencies is a strong enough argument to convert part of the dues into Bitcoin.
Macron’s words regarding Europe
In addition to the pension issue, Macron recently said that Europe must reduce its dependence on the United States. Indeed, he also stated that Europe should stay away from the ongoing conflict between China and Taiwan.
In comments published Sunday, the French president said that Europe should pursue a strategy independent of both Washington and Beijing. In this regard, he stated the following, in fact:
