Pierre Person wants a clear legal framework for crypto
After 5 years in Parliament, the outgoing MP, Person Stonedelivers a 204-page report, entitled “ Currencies, banks and finance: towards a new crypto era “. He reveals his vision of our ecosystem and tries to define, for the attention of French and European political decision-makers, the broad outlines to be taken into account in the regulatory objectives.
Today, I am publishing my latest report on crypto-assets, the result of 18 months of work and several hundred hearings with players in the crypto world.
Here is a non-exhaustive summary of its content (1/18): ⬇️
— Pierre PERSON (@Pierr_Person) June 8, 2022
It compares the current situation to the 90s, when the protocols that allow us to browse the web today were created. It is not these protocols that have been regulated, but the use that is made of the Internet. According to Pierre Person, he must therefore be the same for the crypto ecosystem :
“Therefore, it must be understood here that it is not the Bitcoin network or the Ethereum network that must be regulated, but the uses that accompany them. Similarly, it would be illogical to regulate technological standards such as NFTs without knowing how they will be used in the future. »
So, don’t make the mistake of transpose, to the letter, the framework of traditional finance to that of crypto-assets. The legal definition therefore needs to be clarified. Indeed, a crypto can have the role of stablecoin, security token, governance token or even non-fungible token (NFT).
All these aspects cannot then be dealt with in the same block, otherwise lead to regulatory inconsistencies.
👉 To go further – MiCA: the draft of a European regulation for crypto-assets
Three different approaches
In his report, Pierre Person distinguishes three different approacheson the part of global regulators vis-à-vis the crypto ecosystem.
The American block first, which can be compared to an experimental sandbox. Joe Biden’s Executive Order leaves a certain freedom to technological innovation, to then adjust as needed. This position is intended to consolidate the dominant position of the United States in the world arena.
Moreover, Pierre Person takes as an example the hegemony of dollar pegged stablecoins. The United States brought favorable regulation to Circle’s USDC while the Libra project of Meta, Facebook at the time, was nipped in the bud, as it was initially not supposed to not follow the course of the dollar.
On the other hand, the Chinese vision chooses outright ban, while reclaiming the benefits of blockchain technologies for the benefit of the government. China has also become the first country in the world to deploy a central bank digital currency (MNBC) with the digital yuan.
Finally, Europe acts as the third bloc which, according to the outgoing MEP, has not yet chosen its side, but which he criticizes for being more defensive than proactive.
If Pierre Person considers that the requirements of the status of service provider on digital assets (PSAN) are not disproportionate, he nevertheless calls for a simplification of procedures for obtaining it.
By 2025, MiCa regulations should impose a statute inspired by the PSAN : thecrypto-assets services provider(CAPS). But by then, the technology will have evolved so much, that this framework could be obsolete before even seeing the light of day.
👉 To read – What is the PSAN and how to obtain this status?
The revolution of DeFi and DAOs
Through his overview of the crypto ecosystem, Pierre Person highlights several disruptive points brought about by these technologies. In the report, a central place is occupied by the decentralized autonomous organizations (DAOs).
If theoretically, the geographical location of these is relayed to the background, the regulations to come come to change the situation. If authorities wish to assimilate them to legal entities in their own right, with all the advantages and disadvantages that this implies, the latter will turn to the country where the regulatory framework is most favorable to them.
With the economic benefits that this implies, Pierre Person therefore invites the competent authorities to fully consider this situation.
Of course, this report also mentions the ability of decentralized finance (DeFi) to hand over the management of its assets in everyone’s hands. In general, cryptos as a whole change our relationship to value, this is also how the subject is introduced:
“Crypto-assets constitute a major revolution: a tool for freeing the individual from the rents of digital mega-corporations and large banks, cryptos generate a new relationship to value. »
If it is difficult, by the richness of this study, to make a succinct and exhaustive summary, the tone of the comments always follows the same common thread. That is to say that if regulation is an inevitable step, it must be done in a reasoned and in dialogue with ecosystem players.
It is in this logic, to reconcile innovation and regulation, that Pierre Person defended our ecosystem in the National Assembly, during his mandate as deputy, for which he did not stand again this year.
👉 Also in the news – Hong Kong sees some NFTs as financial assets and imposes regulation
Sources: Medium by Pierre Person, Full report, Image: Mambroise23 via Wikimedia (CC-BY-SA-4.0)
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