French Senate holds a Bitcoin hearing to discuss risks & opportunities

Jan 17, 2014
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This week the French Senate held a hearing to discuss the decentralized currency Bitcoin. As reported by Coindesk, the hearing, which was broadcasted live, featured high-profile French politicians as well as directors from the French Tresory, the Banque de France, the anti-trafficing authority TRACFN, the border-patrol authorities, and notably, Paymium co-founder Gonzague Grandval. Paymium runs Bitcoin Central, a Bitcoin exchange popular in Europe.

The purpose of the hearing was to assess the risks & opportunities associated with Bitcoin, to educate politicians about the currency, as well as to make initial decisions around regulation, taxation, and enablement.

I sat down with Grandval after the senate hearing, and he told me that, while the Banque de France came equipped only with the risks involved, he felt that politicians were genuinely interested in being ahead of the curve on Bitcoin (or at least, not falling any further behind compared to their German & American counterparts than they already are). Grandval runs the only French Bitcoin startup, and says that, while the movement is just starting to get traction in France (a recent Bitcoin meetup was held at a Paris bar which accepts payments via Bitcoin), if France stands idly by or worse, tries (in vain) to limit Bitcoin’s use in France, it will be yet another technology that France follows instead of leads in.

Grandval said that, in response to criticism around the security (and hack-ability) of Bitcoin, the government was receptive to his proposition that the French government encourage companies to develop solutions.

For example, one major problem with Bitcoin today is that its system of public and private keys, which serve simultaneously as a sort of bank account number and a login/password to your account, are easily hackable (or lost, if you store your password offline). In the coming years, there will undoubtedly be companies (like US startup Coinbase, which received funding from USV last year) which will have to build security & exchange layers on top of Bitcoin, in order for it to achieve mass adoption and stability as a currency.

Encouragingly, the Banque de France does not consider Bitcoin a currency to date, meaning it is not subject to many of the financial regulations that it would otherwise be subject to.

The overall tone of the hearing was positive, says Grandval – France recognizes that Bitcoin is not just a fad, and that it is an opportunity the country cannot afford not to be a leader in. Its strong mathematics & engineering background, as well as existing companies like Gemalto, who developed the Chip&Pin protocol popular in debit cards, bode well for France, should the government give the green light on regulation, research & development, and progress.

h/t to Coindesk