Should cryptocurrencies be regulated?  Two specialists discuss

Should cryptocurrencies be regulated? Two specialists discuss

YES / “The collapse of these assets in which some have invested everything has very serious consequences”

By Aurore Lalucq, economist and MEP (S&D), member of the Economic and Monetary Committee.

The “crypto crash” reminds us of the importance and urgency of implementing crypto-asset regulation to protect consumers. Within a week, the valuation of the crypto market fell from $3 trillion to just under $1.2 trillion. The value considered the safest by procryptos literally self-destructed in just 24 hours. The disintegration of TerraUSD dragged down a whole section of the sector. Above all, it ruined many investors who had put their savings in an investment they thought was safe, without knowing the real risks. Thus, not a day goes by without a new scam and new victims. It must be said that the whole sector works like a huge pyramid system. And for good reason: no other sector promises returns of 20%. For the good and simple reason that such returns are impossible! A situation that is furiously reminiscent of the subprime.

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In the crypto sector, everything is good to attract new customers and keep the bubble growing…until the bubble and the scams burst. We see the result. It is therefore our duty, as legislators, to restore this sector to the rule of law. Cryptos are financial assets like any other. They must therefore be subject to the same basic rules of consumer protection (best execution, information, fight against market manipulation) and the fight against illegal practices (money laundering, financing of terrorism, scams of all kinds, etc.). ). To those who explain to us that the simple fact of supervising this sector would risk killing it, I would like to remind you that the real challenge today is to save lives. Because the collapse of these assets in which some had invested everything has very serious consequences, which we can no longer pretend to ignore.

NO / “Wanting to regulate everything and very quickly in analogy with traditional financial markets will make us miss out on Web3”

By Nicolas Louvet, Chairman of Coinhouse, a digital asset service provider(PSAN).

It is not crypto-assets, a term much closer to the reality of this market than “cryptocurrencies”, that must be regulated, but certain players who operate on these markets. Indeed, it is illusory and impossible to regulate computers, computer protocols or databases. Wanting to proceed in this way underlines the lack of knowledge of the principles and operation of crypto-assets and their market. Faced with such a technological revolution, with a market that will grow enormously in the years to come and with the risks that may appear in uses related to financial and payment activities, it is on the other hand necessary to regulate the players who position themselves on key activities in the value chain. This is the case in particular for the activities of buying and selling crypto-assets against fiduciary money, management of market places (stock exchanges) for crypto-assets, payment in crypto-assets, custody of these assets on behalf of third parties.

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The French legislator and regulators (AMF and ACPR) have fully understood this and have imposed compulsory registration of companies carrying out these activities through the Pacte law of 2019. This registration aims to cover the risks relating to money laundering and financing of terrorism. Today, Europe is going much further with the MiCA regulation project by extending the scope of obligations. And this is where the nuance is important. Admittedly, the regulation of activities is necessary, especially since it will allow the development of activities, but it must remain proportionate and take into account the essential nature of crypto-assets: these are new technologies which are not fully mature. and which evolve rapidly. Wanting to regulate everything and very quickly by analogy with traditional financial markets will make us miss out on Web3 and a major technological revolution.



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