After 5 years defending our ecosystem in the National Assembly, Pierre Person publishes a last report on the crypto ecosystem. Through this study of more than 200 pages, he tries to define the lines of conduct to be adopted, in order to bring a healthy regulation for the technology
Pierre Person wants a clear legal framework for crypto
After 5 years in Parliament, outgoing MP Pierre Person delivers a 204-page report, entitled “Currencies, banks and finance: towards a new crypto era”. In it, he reveals his vision of our ecosystem and attempts to define, for the attention of French and European policy makers, the main lines to be held in the objectives of regulations
Today, I publish my latest report on crypto-assets, the result of 18 months of work and several hundred hearings of players in the world of cryptos.
FR https://t.co/FoCIpxnWb4
ENG https://t.co/bbokWfpcBsHere is a non-exhaustive summary of its contents (1/18): ⬇️
– Pierre PERSON (@Pierr_Person) June 8, 2022
He compares the current situation to the 1990s, when the protocols, which 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, the same should be true for the crypto ecosystem:
Therefore, it is important to understand that it is not the Bitcoin network or the Ethereum network that should be regulated, but the uses that accompany them. In the same way, it would be illogical to regulate technological standards such as NFT without knowing how they will be used in the future. “
Thus, one should not make the mistake of transposing, 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 treated from the same block, at the risk of leading to regulatory inconsistencies.
Three different approaches
In his report, Pierre Person distinguishes three different approaches, on the part of global regulators towards the crypto ecosystem.
The American bloc first, which can be compared to an experimental sandbox. Joe Biden’s Executive Order allows a certain amount of freedom for technological innovation, and then regulates as needed. This stance is intended to consolidate the dominant position of the United States in the global arena.
Pierre Person takes as an example the hegemony of stablecoins indexed to the dollar. The United States provided favourable regulation on Circle’s USDC, while Meta’s Libra project, Facebook at the time, was nipped in the bud, as it was not initially intended to follow the dollar rate.
In contrast, China’s vision is to ban blockchain altogether, while reaping 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 (CBDM) with the digital yuan.
Finally, Europe is the third block which, according to the outgoing MEP, has not yet chosen its side, but which he criticises for being more defensive than proactive.
While Pierre Person considers that the requirements for the status of digital asset service provider (DASP) are not disproportionate, he nevertheless calls for a simplification of the procedures for obtaining it.
By 2025, MiCa regulations should impose a status inspired by the PSAN: the crypto-asset services provider (CAPS). But by then, the technology will have evolved so much that this framework could be obsolete before it is even born.
The DeFi and DAO revolution
Through his overview of the crypto ecosystem, Pierre Person highlights several disruptive points brought about by these technologies. A central place in the report is occupied by decentralised autonomous organisations (DAOs).
If theoretically, the geographical location of these organisations is relegated to the background, future regulations will change the situation. If the authorities wish to assimilate them to full legal entities, with all the advantages and disadvantages that this implies, they will turn to the country where the regulatory framework is most favourable to them.
With the economic consequences that this implies, Pierre Person invites the competent authorities to fully consider this situation.
Of course, this report also mentions the ability of decentralised finance (DeFi) to put the management of one’s wealth in the hands of everyone. Generally speaking, cryptos as a whole are changing our relationship to value, which is how the topic is introduced:
“Crypto-assets are a major revolution: a tool for liberating the individual from the rents of digital mega-corporations and big banks, cryptos are generating a new relationship to value. “
While it is difficult, due to the richness of this study, to make a succinct and exhaustive summary, the tone of the remarks always follows the same thread. That is to say, while regulation is an inevitable step, it must be carried out in a reasoned manner and in dialogue with the players in the ecosystem.
It is in this logic, to reconcile innovation and regulation, that Pierre Person defended our ecosystem at the National Assembly, during his mandate as a deputy, for which he did not stand for re-election this year.
