The continuously expanding fiscal deficit of the French central bank may drive a new round of money printing, potentially releasing billions into Bitcoin.
The Banque de France (BdF) stated in a press release issued in March 2025 that it recorded a net loss of 7.7 billion euros (8 billion dollars) in the fiscal year 2024, primarily driven by negative net interest income due to high interest payments.
This has caused the French government's fiscal deficit for 2024 to exceed 168 billion euros (176 billion dollars), accounting for 5.8% of the country's Gross Domestic Product (GDP), far exceeding the EU's 3% limit.
The French central bank has now become one of the worst-performing members in the EU, and this deficit indicates that funds are flowing out of the country.
Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, believes that France's fiscal deficit could catalyze the European Central Bank (ECB) to engage in "trillions of euros" of money printing, meaning new liquidity will flow into Bitcoin (BTC).
"French capital is leaving France. If you look at the overall changes in any other member, France is the worst," Hayes said in an interview with Cointelegraph during TOKEN2049 in Singapore. "The real threat is the outflow of French capital, while Germans and Japanese are investing in their domestic markets as the U.S. is changing the world order."
"This is precisely what drives the ECB to print money now or in the future on a scale of trillions of euros. And that is the overall scale," Hayes said. "This is another major positive for cryptocurrencies."
About 60% of French bonds and debt are held by foreign institutions, with Germany and Japan being the largest holders.
Hayes stated that due to reduced U.S. investments, the German and Japanese capital that previously funded French finances is no longer flowing in.
According to Hayes, the ECB has to either choose to print money later to try to save the European banking system or choose to print money now to support French spending. "There are no other options."
France's increasingly expanding fiscal deficit may prompt the ECB to turn to quantitative easing (QE) policies, where the central bank buys bonds and injects money into the economy to stimulate consumption in the face of economic stagnation.
In 2022, Bitcoin benefited from the quantitative easing policies announced by major global central banks, including the U.S. Federal Reserve.
During the last round of quantitative easing, Bitcoin's price surged over 1050%, skyrocketing from just $6,000 in March 2020 to $69,000 in November 2021, following the Fed's announcement of a $4 trillion bond purchase program on March 23, 2020, during the pandemic.
Original text: “Arthur Hayes: The French Central Bank Deficit is a 'Major Positive' for Bitcoin (BTC)”
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