The obstacles to blockchain adoption in the economy

The blockchain technology, on which cryptocurrencies are based, is gaining more and more followers. “In 2018, companies didn’t want to hear about public blockchains or cryptocurrencies,” recalls Stanislas Barthelemi, a consultant with Blockchain Partner, a consultancy firm linked to KPMG. They have evolved a lot since then, with the increase in use cases making the technology less abstract. “Stablecoins allow for near-instantaneous and ridiculously low-cost transfer of value, when international money transfers are costly for businesses and can take several days,” says the consultant.

Several large groups have been testing blockchain systems in recent yearsS. private, which are similar to centralized databases, quite far from the spirit and initial concept of public, decentralized and accessible to all blockchains to carry out operations. Retail group Carrefour, for example, used the Ethereum blockchain in 2018, implemented as part of a consortium, to develop a traceability system for its chicken industry.

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Private experiments and blockchain

Through a QR code on the package that leads to a web page, consumers can thus consult each stage of the production of poultry batches. In April 2022, the brand announced it would now use blockchain for its organic products. Also in this case, each intermediary compiles the information allowing final buyers to know the origin of the product (name of the producer, location of the field, etc.), the date of collection, the place of packaging or the mode of transport.

For two years, French banks have also made a foray into the blockchain, this time public. “Today there is no longer any talk of private blockchain among my clients”, assures Stanislas Barthelemi. “It could also use the public and take advantage of current liquidity, uses and technical tools already created” within the cryptocurrency industry, he believes.

In July, BNP Paribas joined forces with EDF ENR to tokenize (convert to digital token) and issue a bond on Ethereum to finance a renewable energy project. The goal is to create “new bridges between issuers and investors” and provide “greater transparency” and the ability to verify ESG (Environmental, Social and Governance) data. Société Générale has also used the Ethereum and Tezos blockchains to issue bonds, through its Forge subsidiary dedicated to digital assets.

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Lack of technical skills

However, there are obstacles to wider adoption of blockchain technology. To begin with, it is not intended to extend to all activities. “At one time, there was the idea that we would have stored everything on the blockchain and that it would have been a wonderful solution. But that is not the goal,” emphasizes Jérémy Wauquier, president of the Alyra school, which specializes in blockchain.

“This is a technology designed to store information that has economic value, used by actors who do not trust each other,” he adds. To grow their money, “companies can for example put it in cryptocurrencies, on the blockchain”. Some have already started, like the automaker Tesla, which recently sold three-quarters of its bitcoins, acquired for the sum of $ 1.5 billion in February 2021.

On the other hand, people and entities who know each other well do not need to use blockchain and can share information and make money transfers outside of this encrypted technology.

Also, to use more complex applications on the blockchain, companies are sometimes struggling. “Analytical and consultant profiles are emerging, but there is still a real need for skills for developers and auditing activities,” says Stanislas Barthelemi. These rarer profiles are highly coveted and expensive. “There is a real war of skills, adds Jérémy Wauquier. It is difficult to find people who can master these technologies. When everyone trains, it takes time ”.

Legal and fiscal vagueness

Another factor that can discourage companies looking to explore blockchain: the legal vagueness surrounding this technology and its uses, which are still largely unregulated. The MiCA regulation at the European level must provide a global framework for cryptocurrencies and the activities of intermediaries, such as brokers, who specialize in cryptocurrencies. It is expected to take effect by early 2024. But entire sections of the cryptocurrency universe remain unregulated.

This is especially true for non-fungible tokens, better known by the acronym NFT. “The groups prefer to wait for European legislation and the harmonization of rules before launching a large-scale project linked to the blockchain”, says Stanislas Barthelemi. Jérémy Wauquier also points to “sometimes ambiguous tax rules”, which discourage some companies. And he cites the latent capital gains in cryptocurrencies, on which “companies are taxed in France”. Too heavy and inappropriate fiscal pressure, according to him, which encourages many projects “to be carried out outside France”. Furthermore, still few professionals are able to deal with cryptocurrency in accounting.

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The tax brake adds to the difficulties that specialized cryptocurrency companies may encounter in obtaining the opening of a bank account in France. Banking institutions are often wary of this new, poorly regulated and potentially competitive sector.

Transparency for everyone?

On an international level, Arnaud Doly, CEO of Nabu, specializing in the optimization and digitization of logistics activities, highlights other potential obstacles to the diffusion of the blockchain. For international trade, for example, “this implies that all players share the same format and adopt a single standard, on a blockchain, while today there are a multitude of tools”. He doubts each entity’s desire to converge on the same system, from the subcontractor to the last-mile delivery man at the end of the chain.

Especially since the transparency of the various activities and the different phases of the production process is perhaps not ultimately desired by all companies. Some adapt well to a form of opacity, which the multiple scandals linked to tax havens – from the Offshore Leaks of 2013 to the Pandora Papers of 2021 – have been able to highlight. The cryptocurrency industry itself is far from being a model in this industry. Tether Limited’s legal woes and inability to provide an external audit of its stablecoin (USDT), the third largest cryptocurrency by capitalization, are just one example.

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