Following a meeting at the French Institute in Romania with actors from French Tech in Bucharest around the theme “the future of finance”, our editorial team wanted to give the floor to two Tech managers, Dylan Delhommois and Jamil Benabdallah , both specialists in the matter.
Dylan Delhommois, 24 years old, co-founded the first crypto-asset investment management company in France at the end of 2017. Passionate about all these subjects, he defines himself today as a crypto evangelist, and strongly believes in its massive adoption in the coming years. Graduated with a Master’s degree in Commerce and Marketing, he is now working as an Account Executive for the company CometJobs. He plans to launch an investment fund (around DeFi) in Romania in September.
Jamil Benabdallah, co-founder of H64, a graduate of INALCO and Sciences Po Paris, he served as director of Détente Consultant Eastern Europe, from 2007 to 2017. Expert for the European Commission and the World Bank on issues linked to the sustainable development of territories, he has worked in particular on the digitization of private and public players in the sector. This is how his interest in the Blockchain and the issues of accelerating and democratizing its adoption manifested itself in 2016.
What about the regulation of the crypto/DEFI industry and the use of challenge tools by institutional players such as central banks?
Dylan : Regulation in France has evolved greatly in recent years, the first step in regulation is the appearance of the Flat Tax for profits generated in crypto-assets. The Finance bill adopted in 2019 modeled the securities regime to apply it to crypto-assets, i.e. 30% tax in total on profits with a fixed allowance of 305 euros. A second law appeared in 2019 – the Pacte Law – creating a new status for companies evolving in this field: the PSAN accreditation (service provider on digital assets), many companies are now obliged to have this accreditation. to be able to exercise if they offer services requiring it. Today, there are 37 PSAN approved players.
On a European scale, the MICA (Markets in Crypto-Assets) regulation was adopted on March 15, 2022, making it possible to standardize practices on a European scale. This will make it possible to regulate the issuance and provision of services related to crypto-assets while focusing on the protection of consumers and investors to limit the risk associated with fraudulent products. In addition, these regulations also tackle money laundering and the financing of terrorism.
Central banks are also interested in the creation of CBDCs (Central Bank Digital Currencies) in order to be able to offer similar products today and above all remain controlled and centralized. The first country to be interested and to deploy it currently is China.
Is Romania an interesting market for French Blockchain startups?
Dylan : The philosophy of Blockchain in general is decentralization, so blockchain start-ups are usually made up of employees from all over the world. Many start-ups today find themselves blocked by local legislation that is too restrictive to operate in this area. Romania, in this case, is a sufficiently crypto-friendly country today 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 the DEFI?
How do traditional finance players react to the appearance of DEFI? After an initial phase of criticism, can we speak of the institutionalization of the DEFI?
Jamil: After a very strong hesitation and a reflection and testing phase that continues until today, institutional players see a leading role for Blockchain technology and DEFI in the digital transformation of the sector in the years to come. At the direct investment level, while there are few quantitative reports on the exact levels of institutional investor participation in digital asset markets, qualitative survey-based data suggests growing interest and investment in crypto-assets. Investors are gradually moving from the education phase to the actual investment phase, although this is currently slowed by volatility and the concomitant decline in the stock and crypto-asset markets. This last point is also interesting because it illustrates the institutionalization of the DEFI and the danger that this can represent for small holders/individual investors who represented a significant part of the market until then. Indeed, the financial actors present in the DEFI have adopted the use of crypto-assets for the purposes of diversification and optimization of portfolios, given the apparently uncorrelated nature between the traditional financial market and that of decentralized finance. This assumption is now invalidated by the positive and growing correlation of cryptoassets with traditional asset classes. The increased participation of institutional investors, what we call the institutionalization of DEFI creates channels of contagion between decentralized finance and traditional finance and this, in essence, gives rise to risks for investors at the micro level, for which the world of cryptoassets is less and less an alternative to reduce risk and diversify their portfolios.
Bio of the speakers of the event:
- Mirel Bran is Le Monde’s correspondent in Bucharest and presenter of a program on Radio France Internationale Romania entitled “We come from the future”. On June 22, he will launch the first Romanian book in the form of an 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 Business Angel in about 150 blockchain projects. He was a pioneer of the NFT ecosystem.
- Alexandru Stanescu is a partner at the law firm SLV Legal and a member of the board of directors of ThinkBLOCKtank (the European association of lawyers specialized in blockchain which is based in Luxembourg). He regularly advises start-ups and scale-ups in the blockchain ecosystem, including exchanges, payment providers, crypto-asset managers and NFT creators.
- Constantin Rotariu is co-founder of Bitcoin Romania, a company that connects the traditional and digital retail worlds through a network of bitcoin ATMs. For 8 years, he has been promoting the vast opportunities offered by crypto assets such as Bitcoin as a personal and/or business investment.
- Ioana Frincu is an expert in innovation strategy, with a long experience in the development and management of Blockchain finance technology solutions. She founded the first blockchain development company in Romania. She is currently the CTO of EQIFi and EQIBank.