France Finally Legalizes Lombard Credit Backed By Cryptos
France is Europe. And Europe is the temple of regulation. In this monetary control tower, the Hexagon does not want to play the lone wolf. No question of embracing bitcoin before the 27? Yet, sometimes, it winks at the most daring. Latest twist? A legal clarification on Lombard credit backed by cryptos. Not a revolution. But a step, even if disguised, is still a step.
The crypto Lombard credit was not born yesterday. It was already discussed in hushed banking circles. This loan, guaranteed by a crypto wallet, offers a promise: liquidity without liquidation. You lock your cryptos. You receive euros. In case of default, the collateral goes to the scrapyard.
But where France is finally moving is on the legal framework. The DDADUE 5 law, in force since April 30, allows “the establishment of a pledge by signed declaration of the owner of the cryptos“. One more formality. And one less ambiguity.
This change fits the MiCA logic, the great European crypto market charter. “The crypto Lombard credit is a great tool for structured HODLers“, comments Arnaud Touati . But beware: perhaps we structure, but we do not democratize yet.
Dan Arroche tempers:
No revolution, just a legal clarification.
And still, this is only on paper. The ground remains minefielded. French banks remain skeptical. The risk is too volatile. Solvency ratios too fragile. In short, real use remains marginal.
A regulatory advance does not always rhyme with practical progress. Because in detail, the French tax system is a true labyrinth. And in this labyrinth, crypto Lombard credit might well fall into a trap.
Dan Arroche warns:
The question is whether placing cryptos as collateral = transfer of ownership = taxable event?.
In other words, using your bitcoins as a pledge could activate… taxation. And there, no one is joking anymore.
Two cases must be distinguished:
In other words, a tax lawyer becomes mandatory. To avoid innovation turning into an administrative disaster.
Here are the key data to remember :
A psychological factor is added to this legal equation: fear of banks. Their cautiousness slows adoption. “Obtaining crypto Lombard credit on acceptable terms is almost impossible“, concludes Arroche.
We pretend to legalize, but no one is playing along.
For whom is this new credit? For the average saver? No. For private banking clients, maybe. For large crypto portfolios, surely. This loan remains a wealth optimization tool, not a gateway to regulated DeFi.
In fact, very few players are ready. Few institutions accept this type of pledge. The crypto market is still deemed too unstable. Yet, some see an opportunity here.
This credit can become an alternative to asset sales, maintaining exposure to the market. So it appeals to those who want to “hodl while buying a house“. But provided they are well advised, and well capitalized.
And while some move forward, others denounce. On X, a user mocks:
Historically all war loans were scams. Luxembourg life insurance, crypto in self-custody, the threat is serious.
Could crypto Lombard credit be a Trojan horse to repatriate cryptos on centralized platforms?
MiCA aims to reassure. But for now, it intrigues more than it convinces. As long as the banking infrastructure does not follow, the promise remains dead letter.
France’s slowness on cryptos no longer surprises anyone. Even Michael Saylor, on his American pedestal, singles out this inertia. And invites the country’s players to adopt bitcoin more , rather than regulate it the old way. For now, the Hexagon regulates. It moves forward, but in small steps. Too small? Time will tell.
Could The Next Big Ethereum Killer Be Bitcoin? (Opinion)
Ethereum isn’t the only hot cryptocurrency in May, with some big app-wide changes and a new roadmap .
Bitcoin, the class originator and market cap leader, approved a subtle but big change in May to the way it approves transactions. The network will no longer limit transactions with files larger than 80 bytes.
Previously, Bitcoin limited these types of transactions with an output type called OP_RETURN. The network automatically canceled transactions with files above a tiny size limit. It would turn these into outputs that were unspendable on the network.
But, blockchain developers have found workarounds. For example, there is the BRC-20 standard exploiting Bitcoin ordinals to link files to the blockchain.
Acknowledging the reality of the community, industry, and market’s demand, the Bitcoin Core developer community is scrapping it. They will no longer let OP_RETURN stand in the way of further development along these lines.
That’s another chink in the armor of hardcore BTC maximalists that view Bitcoin NFTs as junk mail on the blockchain and all altcoins and second-layer currencies as distractions from the original cryptocurrency’s true import.
While Bitcoin can be “wrapped” or deposited in smart contracts on other crypto apps like Ethereum and Cardano, and then used in their ecosystems, a smart contract issuance system built right on the old Satoshi layer is another way to do it.
If they press to build a marketable product, the Bitcoin L2 developer community may find along the way that it has certain key advantages over deploying BTC on another L1 network.
CashApp Block founder and CEO Jack Dorsey (who also founded Twitter) predicts Bitcoin will reach $1 million in price by 2030. He was also an early Lightning Network advocate and remains a vocal Lightning proponent.
Could a Bitcoin second layer app ecosystem be part of what the crypto doyen envisions priced into that $1 million Bitcoin price forecast?
GMGN Lianchuang: In certain scenarios, users will suffer losses when trading BSC's DOOD tokens, which are being repaired and will be compensated
GMGN co-founder Haze posted on the X platform that, according to user feedback, there was a problem in the DOOD tokens of BSC transactions, which caused users to suffer losses in certain specific trading scenarios. This type of problem is currently being fixed. After the repair, the losses of the relevant users will be counted and full compensation will be made, and the compensation will be directly transferred to the GMGN trading wallet.
SEC’s Hester Peirce wants crypto sandbox: Wormhole legal chief has concerns
Cathy Yoon commended Commissioner Peirce’s remarks on crypto regulation but expressed concerns over her idea of a regulatory sandbox.
The Securities and Exchange Commission has radically shifted its policy on crypto, bringing voices such as that of Commissioner Hester M. Peirce to the forefront. However, some still believe that her pro-crypto approach has important limitations.
Cathy Yoon, General Counsel at Wormhole Foundation, recently commented on the remarks made by Commissioner Peirce. While she agreed to some extent that regulatory exemptions for crypto are needed, she criticized Peirce’s idea of a regulatory sandbox.
Notably, the debate centers around tokenized securities, which fall under the SEC’s jurisdiction. Any type of security must meet stringent regulatory requirements before the SEC deems it compliant. However, there are significant challenges ahead.
Peirce points to ongoing technical issues as a key obstacle. In particular, the technical infrastructure remains underdeveloped. Yoon acknowledged this as a compelling argument in favor of regulatory exemptions for tokenized securities projects.
“The infrastructure needed to support tokenized securities is still rather undeveloped and expensive to implement,” Yoon, Wormhole.
Still, Yoon noted that she disagrees with Peirce’s concept of a regulatory sandbox. The concept, which Peirce has long advocated, refers to allowing startups to test certain products that exist in a regulatory gray area.
These firms are closely monitored by regulators but face fewer penalties and a reduced compliance burden. Yoon argues that sandboxes sound promising in theory but introduce risks such as arbitrary enforcement and favoritism.
“A sandbox is only as good as the leeway and support a regulator offers to the sandbox participants. There is also a concern that regulators may favor sandbox participants, leading to biased oversight or even weakened enforcement in the long term,” Yoon, Wormhole.
Instead of a regulatory sandbox, Yoon proposed a limited-duration regulatory exemption. This would allow companies to test their products in a real environment, helping them adapt to actual conditions and scale more effectively.