French Tech meeting in Bucharest on the future of finance

After a meeting at the French Institute in Romania with French Tech actors in Bucharest on the future of finance, our editors wanted to give the floor to two technical managers, Dylan Delhommois and Jamil Benabdall, both experts on the subject. .

Dylan Delommois, 24-year-old co-founder of the first cryptocurrency investment management company in France in late 2017. Fascinated by all these topics, he now defines himself as a crypto-evangelist and firmly believes in its mass implementation in the coming years. He holds a master’s degree in commerce and marketing and is currently an account manager at CometJobs. He plans to launch an investment fund (about DeFi) in Romania in September.

Jamil Benabdalla, co-founder of H64, a graduate of INALCO and Sciences Po Paris, he served as director of D├ętente Consultant in Eastern Europe from 2007 to 2017. An expert from the European Commission and the World Bank on issues related to sustainable development, he worked, in particular, on the digitization of private and public players in this sector. This is how his interest in the blockchain and the issue of accelerating and democratizing its adoption manifested itself in 2016.

What about the regulation of the cryptocurrency / DEFI industry and the use of call tools by institutional players such as central banks?

Dylan: Regulation in France has changed significantly in recent years, with the first step in regulation being the emergence of a fixed income tax on cryptocurrencies. The Finance Bill, adopted in 2019, simulates the securities regime for its application to cryptocurrencies, ie 30% of the income tax with a fixed surcharge of 305 euros. In 2019, a second law was introduced – the Pacte Act, which creates a new status for companies developing in this field: accreditation of PSAN (digital asset service provider), many companies are now required to have this accreditation to be able to if they offer services that need it. Today, PSAN has 37 approved players.

On a European scale, on March 15, 2022, the MICA (Crypto Asset Markets) regulation was adopted, which allows standardizing practices on a European scale. This will allow regulation of the issuance and provision of cryptocurrency-related services, focusing on consumer and investor protection to limit the risk associated with fraudulent products. In addition, these rules also apply to money laundering and terrorist financing.

Central banks are also interested in creating the CBDC (Digital Currency of the Central Bank) to be able to offer similar products today and, above all, to remain controlled and centralized. The first country to be interested and deployed now is China.

Is Romania an interesting market for French blockchain startups?

Dylan: Blockchain’s general philosophy is decentralization, so blockchain startups usually consist of employees from around the world. Many startups today are blocked by local law, which is too restrictive to work in this area. In this case, Romania today is quite friendly to cryptocurrencies, and many crypto companies are settling there. In France, access to a bank account is still difficult, despite the promises of the PACTE law.

What is DEFI?

Jamil: Blockchain technology and cryptocurrencies are the basis of the new financial infrastructure, just as the Internet was the basis of the new information infrastructure. Decentralized finance is digital; it operates on a decentralized infrastructure and is open to all, both in terms of use, consultation and participation in its construction. To draw a parallel with the Internet, DEFI is revolutionizing finance as the Internet did for information. In fact, the first information revolution was the printing press, followed by the telegram, telephone, radio, television, and, of course, the Internet. The Internet unites all other revolutions in one: you can listen, read text and watch videos in one place. Moreover, the Internet has not only revolutionized access to content, it has also democratized the creation of this content. Finance did not experience such a revolution. Of course, the vast majority of financial transactions today are conducted electronically, financial players use the Internet to communicate, and execution speed has improved significantly. However, we cannot yet talk about democratization, as the creation of new financial instruments, contracts and agreements remains the prerogative of several major traditional players. The market is still closed, fully controlled by intermediaries. If we compare the information revolution with the financial revolution, for some analysts we are barely at the beginning of the printing press phase. Therefore, DEFI wants to be the Internet of traditional finance and democratize the access of the majority to the creation and use of financial instruments, and this without intermediaries. Of course, there are complex issues of regulation and in particular investor protection.

How do traditional financial players react to the emergence of DEFI? After the initial phase of criticism, can we talk about the institutionalization of DEFI?

Jamil: After very strong hesitations and a phase of reflection and testing that continues to this day, institutional players see the leading role of Blockchain and DEFI technology in the digital transformation of the sector in the coming years. At the level of direct investment, although there are few quantitative reports on the exact levels of institutional investor participation in digital asset markets, qualitative survey data show an increase in interest and investment in cryptocurrencies. Investors are gradually moving from the learning phase to the actual investing phase, although this is now being slowed by volatility and concomitant declines in stock markets and cryptocurrencies. This last point is also interesting because it illustrates the institutionalization of DEFI and the danger it can pose to smallholders / individual investors, who until then were a significant part of the market. Indeed, the financial entities present in DEFI have approved the use of cryptocurrencies for portfolio diversification and optimization, given the apparently non-correlation between the traditional financial market and the decentralized finance market. This assumption is now refuted by the positive and growing ratio of cryptocurrencies to traditional asset classes. Increasing the participation of institutional investors, what we call the institutionalization of DEFI, creates channels of infection between decentralized finance and traditional finance, and this essentially creates risks for micro-level investors, for whom the cryptocurrency world is smaller and less of an alternative to risk reduction and diversification. portfolios.

French technical meetings in Bucharest on this topic

Bio speakers of the event:

  • Mirel Bran is a correspondent for Le Monde in Bucharest and host of a program on Radio France Internationale Romania called “We Come from the Future”. On June 22, he will publish the first Romanian book in the form of NFT (Non Fungible Token) at the French Institute in Bucharest.
  • Benjamin Rameau, former director of Binance, is the founder of Jenny DAO and co-founder of Exotic Markets. He is also a business angel in about 150 blockchain projects. He was a pioneer of the NFT ecosystem.
  • Alexandru Stanescu is a partner at SLV Legal and a member of the board of directors of ThinkBLOCKtank (European Association of Blockchain Lawyers, based in Luxembourg). He regularly advises startups and extended companies in the blockchain ecosystem, including exchanges, payment providers, cryptocurrency managers and NFT creators.
  • Constantin Rotariu is a co-founder of Bitcoin Romania, a company that combines the traditional and digital worlds of retail through a network of bitcoin ATMs. For 8 years, it has been promoting a wide range of opportunities offered by cryptocurrencies such as bitcoin as a personal and / or business investment.
  • Joanna Frinku is an innovation strategy expert with extensive experience in developing and managing blockchain financial technology solutions. She founded the first blockchain development company in Romania. She is currently the Technical Director of EQIFi and EQIBank.