“What will be the future of cryptocurrencies in 2023?”

FIGAROVOX/TRIBUNE – Denis Beau, First Deputy Governor of the Bank de France, believes that 2022 was marked by the bankruptcy of FTX, which highlighted the need to change the legal framework for crypto-assets.

Denis Beau is the first deputy governor of the Banque de France

Will 2022 go down in history as the year that marks the “beginning of the end” of cryptoassets and decentralized finance (known as DEFI)?

Indeed, their highly dynamic and creative development resulted in the collapse of the third most important “stablecoin” system (obviously misnamed), increasing the risks and losses for its players and customers, Terra-Luna. , the collapse of FTX, one of the world’s largest crypto-asset exchanges, and the shake-up of other players in their ecosystem, including liquidity providers such as Genesis or BlockFi. They were accompanied by an almost 70% drop in the capitalization of all crypto-assets, which returned to their level in early 2021.

While these violent upheavals may not yet have their full ripple effects, they are already rich with lessons.

An important lesson is the general principles of the organization and resources, in particular management, internal control, protection of client assets, separation of activities and prevention of conflicts of interest with related entities, accountability, transparency applied to traditional financial players, taking into account the risks inherent in financial activity. So far, these principles have been very limited in scope, undemanding in content and uneven from one jurisdiction to another for players in the crypto-asset world, as this should not unduly slow down the spread of their innovations.

We are sure that crypto-assets and the world of decentralized finance will re-evolve in a beneficial and sustainable way only with an appropriate regulatory framework, trust vector.

Denis Beau

The difficulties faced by certain players, the impact of contagion regardless of borders, the losses and thefts suffered by their customers now necessitate a review of this policy and a rapid development towards broader regulatory requirements at national, European and international levels. , more robust and more aligned with the G20 and FSB’s joint recommendations on consumer protection, financial stability and anti-money laundering. Based on our experience at Banque de France and ACPR as supervisors of traditional financial players and the financial system as a whole, we are convinced that the world of crypto-assets and decentralized finance will only develop in new, beneficial and sustainable ways. with the corresponding regulatory base, the trust vector. Its purpose should be to allow all competitors to be placed on a level playing field, as it has been until now, without being exposed to the harmful consequences of “rogue” actors. It must also aim to strike the right balance between the objectives of protecting customers and maintaining financial stability on the one hand, and operational realities on the other.

Europe has led the way by defining a new regulatory framework known as MICA (Markets for Regulation of Crypto Assets), which is due to enter into force in the first quarter of 2023 and be implemented by the end of the first half of 2023. 2024. Implementation in France in this perspective, rather than simple registration, mandatory authorization of PSANs (Digital Asset Service Providers) is desirable prior to the implementation of the currently discussed MICA. This should facilitate and speed up the adaptation of players established or domiciled in France to a regulatory environment that will allow them to evolve in a framework of trust for all in the path of innovation.

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