Bitcoin in France: senators focus on crypto-assets

Bitcoin, kesako? “It had to happen one day, right? That’s it, it’s now official, the French Senate is interested in crypto-assets. You wonder why. To reg-le-men-ter! But, before making a bill, a commission of inquiry will draw up an inventory of the cryptos in our country. The goal of our parliamentarians is above all to understand this mysterious ecosystem.

An opacity mother of all vices

On July 31, 2022, the Senate website published an explanatory memorandum regarding crypto-assets. First, this document discusses the historical and technological aspects of cryptos and blockchain. It turns out that Bitcoin and cryptos are not currencies, because their value is determined by supply and demand. Moreover, their anonymous use would facilitate illicit transactions.

“Thus crypto-assets, thanks to the blockchain, pursue a simple objective: to make encoded, anonymous, secure, transparent exchanges possible for users and above all opaque for the authorities. »

Unsurprisingly, we first find money laundering via digital assets. This activity has strongly progressed in 2021 to reach $8.6 billion. However, it remains much lower than 2 trillion USD laundered in fiat.

Then comes the financing of terrorism which was taking place through bitcoin ATMs. This case also sounded the death knell for ATM on French territory, at the end of 2020. Finally, the document also mentions the use of cryptocurrencies on the darknet.

Between the rise of crime linked to crypto-assets and the lack of public information, the observation is simple. We have to put things in order.

Bitcoin and cryptocurrencies are used on the darknet

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Insufficient regulation for Bitcoin

According to the document, Christine Lagarde deplores the delay in implementing the MiCA law. Indeed, the regulation should not come into force before 2024. It also pushes the national and European authorities to speed up the process. The President of the ECB also considers that the text is “too restricted”. There is an urgent need to protect consumers at risk.

So, which framework to choose for Bitcoin and other crypto-assets? The author sets out the very wide range of regulations adopted by different countries. He thus refers China’s very restrictive attitude.

Moreover, the States which opt for a flexible regulation would rather be in an unstable political situation. For example, the Ukrainian President Zelensky legalized cryptos on March 16, 2022. This facilitated the receipt of digital asset donations to equip the military. The central bank has since restricted the possibilities of buying cryptos with the hryvnia, the national currency.

The parliamentary text also cites El Salvador which gave Bitcoin legal tender in September 2021. The IMF did not fail to call the country to order. It should not be easy to establish a regulatory text taking into account all these dimensions of the ecosystem.

What does this senatorial commission of inquiry have in store? The author of the text concludes that it is above all urgent to know crypto-assets better in order to perhaps regulate them. A spirit of openness which is commendable. We bet that parliamentarians will have the courtesy to consult professionals in the sector. If regulation is necessary to limit abuse, it should not hamper the innovation and entrepreneurial freedom.

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