Grandstand. The monetary and financial world is currently being shaken up by the emergence of cryptoassets. With more than 2,000 billion dollars in capitalization, this market now has more than 16,000 cryptoassets and has been experiencing meteoric growth in recent years. The capitalization of bitcoin alone, due to the increase in its price, is now roughly equal to the money supply of the Swiss franc.
The phenomenon should therefore not be taken lightly. By its volume, it now directly questions financial public order and the general interest. However, the authorities have so far not taken the measure of the risks and damage that this development could cause. This inaction can no doubt be explained by the difficulty in grasping the diversity of the phenomenon.
Indeed, the thousands of existing cryptoassets are not of the same nature and do not have the same purpose. Some claim to be global monetary alternatives (bitcoin); others only serve to facilitate cross-border payments (ripple); still others are just fun (dogecoin).
An ecological disaster
The development of digital assets certainly makes it possible to shake up certain practices and introduces useful innovations such as the possibility of concluding “smart contracts” thanks to blockchain technology. [blockchain]to dispense with intermediaries in property transfers or to speed up international payments.
However, well-used and well-regulated crypto-assets could play the same role without the major negative character which today taints, more than it serves, their development. Because some cryptoassets, including bitcoin, which is the standard, pose growing risks to our societies.
Because of the energy they require (nearly 131 TWh, more than Belgium and Switzerland), blockchains using a “proof of work” type protocol cause an ecological disaster, which will get worse. The high volatility of bitcoin undermines financial stability because it is operated by players with sometimes fragile capitalization and without safeguards, in markets that are also largely manipulated by a few large holders of cryptoassets.
The financing of criminal or even terrorist activities
Finally, social and monetary cohesion may be threatened by the claims of some to encourage the development of parallel payment systems. Some crypto-assets also pose a serious threat to the security of individuals and States since they facilitate ransom demands, tax evasion or the financing of criminal or even terrorist activities.
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