The Senate of France has conducted hearings into bitcoin and other digital currencies, with a number of speakers from the industry presenting their case today.
The Senate Finance Committee hearing on 15th January was chaired by Philippe Marini of political party UMP, and featured a number of high-profile representatives from the Bank of France, the Treasury Department, the Ministry of Finance’s anti-money laundering arm Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins), DNRED (National Directorate of Intelligence and Customs Investigations) and FING (Fondation Internet Nouvelle Génération).
Speaking on bitcoin’s behalf was Gonzague Grandval, co-founder and CEO of Paymium, which operates the bitcoin exchange Bitcoin-Central for Eurozone customers and its own payment processing service for merchants accepting bitcoin.
Positive approach
Again, the initial focus seemed to be on the risks and hazards of “unregulated currencies” and the ability to exchange them into “real world” legal tender.
Reddit users ‘mmitech’, ‘Schlagv’ and ‘bitcoin-artist’ watched a live broadcast of events and posted brief summaries of the outcome. Among the highlights were:
- The French authorities see digital currencies as a kind of competition between powerful economies like the USA, Germany and UK, and feel a need for France to catch up.
- Making bitcoin illegal is not an option and there seems to be genuine innovation behind it. That said, they do not know yet what to do next or how it could be regulated.
- Committee Chairman Marini was open to new information and didn’t show any bias against bitcoin, saying France should embrace and welcome new technologies.
- The Senate committee apparently didn’t understand the concept of a decentralized and distributed system like bitcoin, asking “Who owns the protocol?” and seeming not to follow when the answer was “No-one”.
- The head of anti-money laundering arm Tracfin said they have been monitoring bitcoin’s progress since 2011, and are “ready to catch the bad guys”.
- While negative points like volatility, investment risk and use in illicit activities was mentioned, it was not a focus and even speculation was not considered a bad thing.
Bitcoin enthusiast Adrien Lafuma, of MasterXchange, said the French government would prefer to regulate digital currencies than try to prevent their use, but was curious about how to calculate taxes in currencies that can’t be tracked or detected. He said it acknowledged bitcoin is not a passing fad, but it is also not currency by the Banque De France’s definition and would take some time to reach a consensus on how to properly approach it.
Paymium’s Grandval reportedly became upset at the use of the word “tulips,” by the head of Tracfin, a reference to the cliche often employed by bitcoin detractors comparing digital currency speculation to the Dutch Tulip Mania market bubble of the 1630s.
He also hinted that Germany was ahead of France in this area, suggesting France probably didn’t want to be left behind.
There was also news that a new Bitcoin Foundation for Europe will be formed.
Wait and see
Overall, the French Senate took a similar approach to that of the US Senate in November, acknowledging that bitcoin and digital currencies are indeed a real phenomenon and cannot simply be ignored, but understanding there are still many questions as to the role they will play and where it fits legally.
That said, there is still much that the French authorities (and others globally) do not understand about bitcoin and digital currencies, so most are still taking a “wait and see” approach before deciding how government should be involved.
This probably mirrors governments’ approach to the early Internet, which grew at too fast a pace for most legislators to understand. Attempts to regulate the space according to traditional media rules have been largely futile.
French Senate interior image via Flickr
French Senate exterior image via Shutterstock