MiCA regulation, a brake rather than a 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 players in the DeFi sector would be forced to become their own legal entitiesin order to continue to exist in Europe.
For Marc Zeller from AavePablo Veyrat of Protocol Angle and Romain Figuereo from protocol Paladin, which were questioned by Cryptoast, this is nonsense. Since DeFi is by nature decentralized, it loses everything that makes it unique by falling into the same fold as centralized platforms.
Furthermore, overly strict regulation in Europe would push the continent once again to fall behind the United States. Web2 was created around North America, but Web3 still has the opportunity to expand elsewhere, especially in Europe. Unfortunately, rules such as those outlined by MiCA tend to hamper the development of DeFi especially on the Old Continent.
The main recommendation of Adan and part of the sector is therefore the following: take the time to reflect. Decentralized finance being an extremely innovative sector, it cannot be regulated in a hurryon models that apply to centralized operations, and therefore very different.
Transfers of funds (TFR): direct consequences for NSPs
Another problem of European regulations is the revision of the regulation applying to transfers of funds (TFR). Europe wants to see this rule applied to the cryptocurrency sector, but in reality, it makes things much more complex.
On the one hand because it is technically difficult to collect information or apply limitations to projects which by nature place the responsibility for transactions on users, and not a centralized entity. On the other hand because considering that the slightest crypto transaction falls under this rule, it could scare away crucial players outside of Europeto territories with more flexible regulations that are more conducive to experimentation.
Simon Douyer ofAploÉlodie Trevillot of the bank Delubac & CompanyRija Rameloarison of Just Mining and Pierre Gerard of Scorechain thus agree on one point: it is not a question of ignoring all regulations, but of adapting them to the sector, under penalty of seeing the disappearance of what makes the strength of the PSAN status, which is, as we recall, a relative French exception.
NFTs: too heterogeneous to be regulated by MiCA?
Another sector that arouses the concerns of local players: non-fungible tokens (NFT). For Frederic Montagnon ofArianee and Quentin de Beauchesne ofOwnestthe risk is to consider NFTs as financial objects, rather than as technologies.
At their core, NFTs are indeed just a certificate of authenticity. This technology has extremely vast fields of application, but it ultimately remains a means to certify something on the blockchain. The various particularly publicized uses, such as profile photos, are in fact only one facet of the field.
Considering NFTs as financial objects therefore poses two problems: on the one hand, it rules out the technological novelty they represent, by reducing them to assets. On the other hand, it poses considerable technical problems. NFTs can be used as tools for traceability, customer relations, document certification, etc. If they are then subject to strict rules which do not correspond to their uses, this too could completely hamper the development of the sector.
The future “European PSANs”: worrying limitations
Simon Douyer ofAploNicolas Louvet of CoinhouseRija Rameloarison of Just Mining and Mark Kepeneghian of Kriptown say it: the regulation of the cryptocurrency sector is necessary, given the considerable importance it has taken. But in an innovation sector, overregulating represents a danger, which could potentially have more deleterious consequences than a temporary absence of regulation.
Sector players point in particular to the requirements of MiCA in terms of equity, which can hold back small and medium-sized enterprises. They also mention the possibility of moving their companies, to be able to include themselves in clearer jurisdictions, if they find themselves too hampered at European level. The future sesame of the EU must therefore provide sufficient flexibility.
Here too, the risk is indeed to scare off innovative players towards greener pastures, while Europe could precisely become a nerve center for the cryptocurrency industry.
👉 Discover our presentation of Just Mining
Monitoring self-hosted wallets: simply unenforceable?
One of the most criticized points of the European regulatory projects is that which concerns self-hosted portfolios, that is to say those which are not based on a centralized entity, like a Ledger for example. All transactions between this type of wallets and regulated entities could be monitored, with very extensive information gathering on users.
For Nicolas Louvet of CoinhousePascal Gauthier from Ledger and Florian Le Goff of Synaps, this eventuality is simply technically inapplicable. In addition, the United States, Switzerland and other territories have already chosen not to apply the surveillance rule to “unhosted wallets”, Europe therefore stands out greatly by proposing this measure.
Again, the regulator seems limited in its view of the technology that underpins self-hosted wallets. According to players in the sector, massive surveillance would thus hamper companies enormously, while not particularly allowing them to fight more effectively. against money laundering and terrorist financing.
👉 Read about it – European Union: German government opposes systematic monitoring of self-hosted wallets
The thorny issue of cryptocurrency mining
For players in the sector, the cryptocurrency mining sector can very well fit into the ecological objectives of the European Union. Thomas Charbonnel from BBGSAlexandre Teinturier and Maxime Chery of Metis and Youssef El Manssouri of Sesterce point to the lack of information that still weighs heavily on mining-related companies.
Indeed, the European Union seems to base its draft regulations on obsolete data, or vastly exaggerated data, particularly by the media. According to players in the sector, it is therefore urgent to consider mining as an industry in its own rightto regulate it more precisely.
Moreover, this industry can be seen as a flexible means of supporting the existing electrical network, in particular by consuming the surplus that cannot be stored. It also promotes green electricity production – the least expensive for minors. There is therefore considerable educational work to be done so that regulators better understand the realities of mining.
The actors of the French-speaking cryptosphere are not, as we sometimes hear, in a posture of systematic opposition to regulation. On the contrary, they think it’s 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 been the case for Web2.
👉 To go further – Outgoing MP Pierre Person presents a report on the crypto ecosystem