France is certainly not known as the best homeland when it comes to the cryptocurrency sector. This is despite Bruno Le Maire saying late last year that France should soon play a role as a "global hub" in the sector. A position for which we are still waiting political decisions other than simply repressive ones – or absurd – against this digital economy.
Since the beginning of the year, however, the United States seems to have risen to the challenge. This doing much worse with the active help of Gary GenslerThe Securities and Exchange Commission is the sole owner of the adrift ship. So much so that some of the players in this ecosystem are considering Europe – and its MiCA legal framework – as a more hospitable, or at least more readable, land. An environment in which the recent “discussion” launched by the MFA on DeFi it might seem almost timely…
MFA – A Discussion on Decentralized Finance (DeFi)
Given the current trend applied by the French government , the principle of “discussion” may seem a bit optimisticbecause in return we will have to be able to listen. In any case, this is the dynamic officially implemented by the Autorité des Marchés Financiers (AMF) regarding the "regulatory issues raised by the new financial activities on crypto-assets based on automated, decentralized and disintermediated protocols that make up the emerging ecosystem of DeFi”. The title has the merit of being detailed!
In fact, this supervisory body seems to want to define what decentralized finance actually is… at least from a regulatory point of view. And this apparently simple goal has all the potential to become a great initiative.a complex process, given the "different specific concepts of this environment". Because, as the MFA points out, DeFi “offers an alternative to traditional financial services, claiming to operate (…) without the need for human intervention”. And it goes without saying that there is no place (yet) for this type of smart contract-based business.
Naturally, the MFA justifies the need for this discussion by pointing to “the high media exposure surrounding the collapse of the Earth-Moon ecosystem in May 2022”. This is far from positive advertising, which allows for justify the desire for stricter regulation in the eyes of a public opinion afflicted by numerous prejudices about this digital economy, between abusive pollution and purely speculative interests.
DeFi – “A progressive and proportionate approach”
This discussion is open to practitioners of the cryptocurrency ecosystem until September 30 next. The stated objective is to "feed European and international work on these issues". The trend is presented by the MFA as "progressive and proportionate".
The goal is clearly to try to determine the various components of DeFi. Namely, blockchain protocols, smart contracts, decentralized platforms (DEX) or even “the governance issues posed by these new models that allow users to participate directly in the management of the protocols by interacting on the blockchain”.
"The MFA advocates a phased and proportionate approach that respects the “same business, same risk, same regulation” principle when designing and implementing an appropriate regulatory framework for DeFi. This approach should also be coordinated, given the cross-border nature of DeFi activities, to foster the emergence of a fair market that fosters innovation and protects investors.. "
It is therefore aboutpretty good newsAt least as long as the goal is to better discover and understand the DeFi industry. But the real question concerns the use that will be made of the "results" obtained during this discussion. While it is “progressive and proportionate,” MFA's desire for regulation could quickly be seen as inappropriate and repressive by the defenders of this decentralized economy. A matter to be followed carefully…
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