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French Crypto Report: Don’t Regulate Cryptocurrencies

BERLIN, GERMANY – MAY 22: New French Finance Minister Bruno Le Maire speaks to the media following talks with German Finance Minister Wolfgang Schaeuble on May 22, 2017 in Berlin, Germany. (Photo by Sean Gallup/Getty Images)

The head of the French Crypto Regulatory Task Force, Jean-Pierre Landau, released a 97-page report outlining how it was “neither desirable nor necessary” to regulate cryptocurrency.

Landau—or, as he is nicknamed “Monsieur Bitcoin”—was tasked in January 2018 by the French Minister of the Economy Bruno Le Maire to analyze cryptocurrency adoption in France. The report went public July 5. Landau’s half-optimistic, half-pessimistic conclusion in the report was somewhat shocking to those who remember him as a crypto-skeptic, comparing Bitcoin to 17th century tulip mania in 2014.

“The development of the Fintechs brings promising opportunities for our economy and financial position,” Landau wrote in the document, translated by Blockchain News. “The emergence of a number of cryptocurrencies such as Bitcoin, however raises questions about the possible risks these currencies may incur for the financial system, particularly because of their high volatility.”

Landau goes on to mention the commonly noted “obvious dark side” of cryptocurrencies, including slow transactions, high fees, money laundering, short-term incentives, low transaction volume, frequent scams, terrorist threats and anonymity leading to criminal activity.

He attributes these characteristics to decentralization, writing: “The ambition of cryptocurrencies is beautiful, but difficult to satisfy… the root cause of this inefficiency lies in the decentralized management of the currency.”

Landau continues: “Despite these doubts and uncertainties, we must take cryptocurrencies seriously. The excitement they generate helps the advent — and funding — of promising technologies. They pose fundamental and profound questions about the future of payments, money and finance in the digital age.”

In the report, Landau goes on to propose a myriad of solutions. For one, a “Euro-Bitlicense” that would allow European countries to test drive the technology. Landau also advises an increase in asset managers, a cut in taxes on crypto and for French banks to remain separate from crypto activity for security purposes. More optimistically, Landau encourages widespread adoption of blockchain technology, citing the Banque de France’s recent adoption, and going so far as to suggest that the 2024 Olympic Games use the technology.

Landau concludes that  “we must dissociate technological innovation—which we should encourage and stimulate—from monetary and financial innovation, which should be considered with care.”

Alexandra Yetter
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