BFM CRYPTO INTERVIEW – Bruno Le Maire gave BFM Crypto his first major interview about cryptocurrencies. The Minister of Economy and Finance goes into detail on his vision for this sector and assures that he wants to make France “the European center of the crypto-asset ecosystem”.
This is the first time that Minister of Economy and Finance Bruno Le Maire has taken the time to talk about the cryptocurrency ecosystem in several years. If he hasn’t changed his vision for the queen of cryptocurrencies, bitcoin, his position is refined as the ecosystem evolves. As we have seen in the last few months, the cryptocurrency market moves very fast, which is as scary as it is exciting. In this changing context, Bruno Le Maire wants to make France the European “hub” of the crypto ecosystem.
The Minister of Economy also returns to the negotiations for the European regulation of MiCa, the arrival of giants such as Binance and Crypto.com in France or even for decentralized finance (DeFi). It also indicates that it is working on a report on the environmental impact of crypto-assets and wants to use 2023 to deepen reflection with the entire sector in order to determine whether new adaptations in tax legislation are necessary.
BFM Crypto: What is Bercy’s roadmap in the field of cryptocurrencies?
Bruno Mayor: Our guide, with Jean-Noël Barrot (Minister Delegate for Digital Transition, editor’s note), is simple. We want to make the European Union the leading economic area in the world in terms of structuring and organizing the crypto-asset market. And we want France to be the European hub of the crypto-asset ecosystem within it.
How do you plan to do this?
First we must avoid two temptations that would be fatal to us. The first is fear: fear of innovation, fear of competition, fear of decentralization. This fear would lead to the suffocation of the crypto ecosystem and its potential to serve everyone. The second is idolatry: the idolatry of a world without a state, without a central bank, without borders and ultimately without money. This idolatry would endanger our sovereignty, but above all the most fragile among us.
These two pitfalls have led, around the world, to policies that I oppose, in one way or another. But I have faith. In France, we are not threatened by either of these two temptations and the principle of responsibility prevails.
So what should be done?
We must move towards the future with openness and responsibility. This is what we have done for five years and this is what we will continue to do. Since 2017, we bet that, in terms of crypto-assets, we can combine protection and expansion, regulation and attractiveness. Why? Because the consubstantial risks of crypto-assets impose a condition sine qua non for the dynamic and orderly development of the market: trust.
We need to remember where we came from in 2017 in terms of supporting attractiveness and innovation. We began work immediately, with extensive consultation prior to the Covenant Act. We have created, with the status of PSAN (digital asset service provider), the most advanced regulatory framework in Europe, seeking the right balance between the protection of savers and the development of activity. It is in this new framework that a whole group of French companies has been formed, above all thanks to the talent, courage and conquering spirit of our young entrepreneurs. Today, France brings together some of the most innovative PSANs in the world and can count on an extraordinary concentration of crypto skills, be they scientific, IT, financial, legal or commercial.
We wanted to carry this ambition on a European scale. And in 2022, it was under the French presidency of the Council of the European Union that we found an ambitious political compromise for the MiCa regulation. This new framework, which will come into force from 2024, is largely inspired by our national framework and is its natural extension. Actors who get French approval from PSAN will get European approval from MiCa tomorrow much easier.
Here too, our rules, combined with our many talents, are a pillar of our attractiveness. I am proud that thus, in just a few months, we have attracted to Paris two of the biggest platforms in the world: Binance and Crypto.com. Other global players, I believe, will choose France.
We will pursue this strategy in the coming months and years with three priorities. First, to consolidate our achievements, accelerating our attractiveness policy, attracting global players, but also mobilizing more private funds for the development of new players. Then ensuring, at the European level and in cooperation with the ECB, that Europe can quickly create its own sovereign digital euro. Finally, exploring all the potential offered by NFTs and decentralized finance, in order to position France as a pioneer of the global Internet.
How does France intend to anticipate the developments in this sector so that MiCa really stays with the reality of the sector in a year or two?
There will always be a time lag in regulating innovation. It is a constant in societies open to progress. The key is to be aware of this and ensure that regulations are not intended to stifle innovation. This was our priority with the MiCa regulation that we implemented under the French presidency of the Council of the European Union.
Specifically, this priority is reflected in two principles. The first is the principle of adaptation. Thus, MiCa plans two progress reports, after two years and then after four years, to make an assessment of the implementation of the regulation and to compare it with the evolution of practices. The second is the principle of cantonment. MiCa only deals with topics we consider mature enough to fix. NFTs and DeFi (“Decentralized Finance”, Ed.) are therefore not directly included. In France, we will be particularly active in positioning ourselves as pioneers in these two new universes.
What is Bercy’s position on DeFi?
Since 2017, we have assumed our desire to make Paris the leading financial center in Europe. Because this is a source of prosperity, jobs, tax revenue, but also cultural and intellectual mix. As such, we cannot miss the new trends that tomorrow may reveal a transformative power for the financial industry. This is why I am delighted that new businesses, as well as large, century-old banking groups, have fully invested in developing the potential of DeFi. It is still too early to fully measure possible advances. There will be great successes, but also failures. This is what characterizes innovation.
The giant Binance announced in mid-September that it wanted to strengthen its presence in France. Could this be beneficial or rather a hindrance for French crypto players?
We will not make France a global crypto-asset hub by isolating itself from the rest of the world. Therefore, our ability to attract the world’s largest crypto players is at the heart of our financial attractiveness policy. But we do it with rigor, realism and pragmatism. Players wishing to serve the European market tomorrow will have to comply with European and, before the entry into force of MICA, national regulations.
That’s what players like Binance did last May and Crypto.com last month. These two scholarships are registered as PSAN in the AMF. Other international actors may follow, wishing to make France their base camp in Europe. At the same time, these actors want to continue to develop by fertilizing the rich national ecosystem. I am pleased with their desire to create investment funds in crypto technologies for France. It will be for us more innovation, more digital sovereignty, more prosperity and ultimately more jobs.
At the beginning of September, Bercy invited him Crypto industry players to discuss the environmental impact of cryptocurrencies. What is Bercy’s position on mining?
Digital technology can be a key lever for the environmental transition, in that it makes it possible, for example, to reduce the needs for transport, production or even storage. But it also contributes to greenhouse gas emissions and the use of scarce resources. It is our responsibility to reduce its carbon footprint. We therefore wanted, from the previous term, to ensure that digital technology was included in our environmental strategy.
And this is also what we want to do with blockchain and crypto-assets. But we want to do it on a scientific and rigorous basis. That is why we are working on a report on the environmental impact of crypto-assets. We do this with all interested players, in comprehensive meetings, like the one you mentioned. The objective is twofold: to see how the sector can reduce its emissions, especially in terms of mining, and how it can contribute to the ecological transition. I know that for this I can count on our French players, who, it should be noted, also have an economic interest in limiting their energy consumption and are moving more and more towards renewable sources. This is a dynamic we should encourage. For now, I’m satisfied of the transition from Ethereum to proof of action consumes much less energy.
Will cryptocurrency tax be matched with that of stocks? And if not, why?
Cryptocurrencies are not of the same nature as stocks: they are not company titles. In this, a pure and simple alignment of taxation with actions is not necessarily a desirable objective.
The evolution of technologies and uses of cryptocurrencies may call some current standards into question. Therefore, we would like to use the year 2023 to deepen our reflections with all interested actors, in order to determine whether new adaptations in the tax legislation are necessary.
In the United States, Colorado now accepts cryptocurrency to pay its taxes. Could this one day happen in France?
This is not on the agenda. Our currency is the euro and having only one currency to pay taxes is a condition of our unity. I don’t see how we can ensure equality before taxes if everyone chooses their own currency to pay taxes.
To date, very few French retailers accept bitcoin as a means of payment, although we know that 8% of French people hold cryptocurrencies. Can this change?
I say it unequivocally, our currency must remain the euro and bitcoin is not intended to become a large-scale means of payment in the European Union. This is first and foremost a matter of social cohesion. Money, because it is the means of exchange of goods and services and the reward for work, is at the center of trust in a society. This is exemplified by the euro, which enjoys worldwide credibility. It is also a subject of sovereignty. We cannot be masters of our destiny without mastering our monetary policy in Europe.
On the other hand, the affirmation of the euro as the single reference currency should not prevent us from benefiting from the potential that blockchain offers. This is why I follow with interest the work of the ECB to design a digital euro. This project must preserve our sovereignty. In the same way, MiCa should allow the development of stable currencies backed by the euro, while ensuring their strict parity. I believe in the virtues of blockchain in the service of the euro, not in abandoning it in favor of bitcoin.