Cryptocurrencies and the blockchain must work for Europe’s sovereignty, according to Europlace

As a wind of regulation blows around the world on cryptocurrencies, Europlace, the organization responsible for promoting the Parisian financial center, goes with its own way to “ promote the emergence of a powerful and competitive digital ecosystem in France and Europe “, According to the note published this Thursday 24 March by its“ Digital Finance and Use Cases ”Committee.

These recommendations come as institutions sent two salvoes against cryptocurrencies in quick succession this week, such as European Central Bank (ECB) boss Christine Lagarde who sees a “threat” in the context of the war in Ukraine, as well as the governor of la Banque de France François Villeroy de Galhau who compared bitcoin to “tulip mania”.

However, despite these two caveats, the notoriety of these crypto-assets traded thanks to the decentralized blockchain protocol is growing. IAlready 8% of French people have placed part of their wool socks on one of 12,000 cryptocurrencies (listed by CoinGecko), according to a KPMG study commissioned by the Association for the development of digital assets (Adan) published in February.

Asset management, split payment, life insurance …

Therefore, the note from the Europlace Committee, composed of leaders of the traditional banking sector (Société Générale, BNP Paribas, Euronext, Natixis) and new blockchain and crypto companies (such as Coinhouse, Napoleon AM, Tobam, Adan), takes into account financial practices of the French. For example, it offers an original tool to bring people closer to the sphere of crypto-assets thanks to “The inclusion of cryptocurrencies in certain types of funds and in life insurance contracts permitted by the PACTE law (Art. 88) and therefore offer an alternative to the direct purchase of cryptocurrencies. “

On the aspect of taxes to be applied to individual investors and blockchain companies, this working group argues “Bringing the taxation of cryptocurrencies closer to that of financial instruments”.

Furthermore, while the split payment trend is booming, Europlace recommends bringing this trend to blockchain technologies and “Facilitating the democratization of access to investment through splitting, that is, the possibility of investing small amounts in fractions of shares”.

Fractional payment: Bercy places the question of supervising practices in the hands of Brussels

European sovereignty via blockchain

In addition to these recommendations, there is the official support of the Parisian organization for the Central Bank Digital Currency (MNBC) project, on which the Banque de France has been working at the French level for two years, in close collaboration with the ECB, which is working also on the digital euro. It is mainly about clearing the field before making a decision within two years. The competition between central banks around the world is launched, with the advance of China with the e-yuan already in circulation, but also the administration of Joe Biden that wants to accelerate on the subject.

Furthermore, the committee supports the defense of European sovereignty, thanks to the blockchain. “To be able to distribute European securities more widely, on distributed ledger technologies, while ensuring the purpose of operations within the Blockchain. Guaranteeing European autonomy on Blockchain / DLT (ed) “he wrote.

Suppressed, “European industry and the financial center of Paris have an important card to play to consolidate their position in global competition”, says the Europlace association, chaired by Agustin de Romanet (Groupe ADP). To this end, the working group recommends in particular: the cross-border issuance and distribution of digitized financial securities (…) to capitalize on French and European leadership in wealth management.

Except that regulation at the European level is taking a long time to implement. A first part was drawn up with the vote of the MiCA (Cryptographic Assets Market), which establishes a first regulatory framework, to be implemented in 2024. A second part remains awaited at European level, in particular on the fiscal side, towards a harmonization of systems within the Member States. Furthermore, although this first text is considered incomplete by some blockchain professionals, the committee still recommends a week after the MiCA vote to: “Act to ensure that current European regulations adapt the definitions and responsibilities of custodians, registrars, custodians in the context of Blockchains. “

The new world competition: Europlace against the City

Especially since, as in traditional finance, the former EU member, the City, does not intend to miss the title of world capital. For cryptocurrencies, and after its offensives in fintech, it also intends to position itself on the so-called “Web3” technologies and decentralized finance (DeFI).

“Britain’s dominance in blockchain investing mirrors our position in fintech investing in general, with $ 11.6 billion in investments captured in 2021, more than six European neighbors combined.”says Adam Jackson, director of Innovate Finance, quoted this week by local City AM media

The director of this British entity is also calling for the emergence of a “strong vision of the government”. A promise that is far from being kept. Across the Channel, the UK’s financial regulator, the FCA (Financial conduct authority) regularly crack down on the sale and purchase of cryptocurrencies on new platforms.

Maintaining control of finance is a crucial issue for the UK. The British capital maintains its second world position Index of global financial centers (GFCI) in March 2022. Paris comes out of the Top 10, in 11th place (-1 place) of this semi-annual ranking that detects the most competitive financial centers. “Yes, tomorrow Paris will be the leading financial center in Europe” Economy Minister Bruno Le Maire announced in 2018, six months before the actual entry of Brexit.