MiCA regulation, more brake than vector for the development of DeFi?
MiCA would particularly affect the decentralized finance (DeFi) sector. Indeed, regulation was created with centralized platforms in mind. This means that the DeFi industry players they would be forced to become their own legal personsto continue to exist in Europe.
To Marc Zeller from AvePablo Veyrat of Protocol Angle and Romain Figuereo from the protocol Paladin, who have been questioned by Cryptoast, this is nonsense. Since DeFi is decentralized by nature, it loses everything that makes it unique by falling into the same fold as centralized platforms.
Furthermore, excessively tight regulation in Europe would once again push the continent to lag behind the United States. Web2 was created throughout North America, but Web3 still has the opportunity to expand elsewhere, especially in Europe. Unfortunately, rules such as those outlined by the MiCA tend to hinder the development of DeFi, especially in the Old Continent.
The main recommendation from Adan and part of the industry is therefore the following: take time to reflect. Since decentralized finance is an extremely innovative sector, cannot be adjusted quicklyon models that apply to centralized operations, and therefore very different.
Fund transfers (TFR): direct consequences for NSPs
Another problem of the European legislation is the revision of the legislation application to transfers of funds (TFR). Europe wants to see this rule applied to the cryptocurrency industry, but it actually makes things much more complex.
On the one hand, because it is technically difficult to collect information or apply limitations to projects that by nature attribute the responsibility for transactions to users and not to a centralized entity. On the other hand because considering that the slightest cryptographic transaction falls under this rule, it could scare crucial players outside of Europeto territories with more flexible regulations and more favorable to experimentation.
Simon Douyer ofApolloÉlodie Trevellot of the bank Deluba & CompanyRija Rameloarison of Mining only and Pierre Gerard of Scorechain therefore we agree on one point: it is not a question of ignoring all the regulations, but of adapting them to the sector, on pain of the disappearance of what makes the strength of the PSAN status, which is, as we recall, an exceptional French relative.
NFT: too heterogeneous to be regulated by the MiCA?
Another sector that raises the concerns of local actors: non-fungible tokens (NFT). For Frederic Montagnon’sAriane and Quentin de Beauchesne ofThe ownerthe risk is to consider NFTs as financial objects, rather than technologies.
At their core, NFTs are really just a certificate of authenticity. This technology has extremely broad fields of application, but ultimately it remains a means to certify something on the blockchain. The various uses that are particularly advertised, such as profile photos, are in fact only a facet of the field.
Considering NFTs as financial objects therefore poses two problems: on the one hand, the technological innovation they represent is excluded, reducing them to assets. On the other hand, it poses significant technical problems. NFTs can be used as tools for traceability, customer relations, document certification, etc. And if they are subject to strict rules that do not correspond to their uses, this too could completely hinder the development of the sector.
Future “European PSAN”: worrying limits
Simon Douyer ofApolloNicolas Louvet of CoinhouseRija Rameloarison of Mining only and Mark Kepeneghian of City of Crypto say it: regulation of the cryptocurrency sector is necessary, given the considerable importance it has assumed. But in an innovation sector, over-regulation poses a danger, which could have more detrimental consequences than a temporary lack of regulation.
Industry players particularly emphasize the requirements of the MiCA in terms of equity, which can hold back small and medium-sized businesses. They also cite the possibility of moving their companies, to be able to enter clearer jurisdictions, if they find themselves too hampered at the European level. The future sesame of the EU must therefore provide sufficient flexibility.
Here, too, the risk is in fact that of scaring innovative actors towards greener pastures, while Europe itself could become so a nerve center for the cryptocurrency industry.
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Self-hosted wallet tracking: simply inapplicable?
One of the most criticized points of European regulatory projects is that of self-hosted portfolios, i.e. those that are not based on a centralized entity, such as a Ledger. All transactions between this type of portfolio and regulated entities could be monitored, with a very large collection of information on users.
For Nicolas Louvet of CoinhousePascal Gauthier from Ledger and Florian Le Goff of synapses, this eventuality is simply technically inapplicable. Furthermore, the United States, Switzerland and other territories have already chosen not to apply the surveillance rule to “unhosted wallets”, Europe therefore stands out a lot proposing this provision.
Again, the regulator seems limited in his view of the technology behind self-hosted portfolios. According to industry players, massive surveillance would therefore hinder companies enormously, while not allowing them in particular to fight more effectively. against money laundering and terrorist financing.
👉 Read more – European Union: German government opposes systematic monitoring of self-hosted portfolios
The thorny issue of cryptocurrency mining
For industry players, the cryptocurrency mining sector may very well fall within the ecological goals of the European Union. Thomas Charbonnel from BBGSAlexandre Teinturier and Maxime Chery of Metis and Youssef El Manssouri of Sesterzo underline the lack of information that still weighs heavily on companies related to the mining sector.
Indeed, the European Union appears to be basing its draft regulations on outdated data, or widely exaggerated data, particularly from the media. According to the players in the sector, therefore, it is urgent to think about mining as an industry in its own rightto adjust it more precisely.
Furthermore, this industry can be seen as a flexible means of supporting the existing electricity grid, in particular by consuming the surplus that cannot be stored. It also promotes green electricity production – the cheapest for minors. There is therefore considerable educational work to be done so that regulators understand the realities of mining better.
The actors of the Francophone cryptosphere are not, as we sometimes hear, in a position of systematic opposition to regulation. On the contrary, they think it is necessary. But this must be based both on a real knowledge of the subject and on an adaptation to mechanisms that are very different from “classic” companies.
Without it, companies fear that Europe does not miss the Web3 train and leaves the field open to other territories, including the United States, as has already happened for Web2.
👉 To go further – Outgoing MP Pierre Person presents a report on the crypto ecosystem