NFTs, Metaverse and DeFi Have Pushed Crypto Markets to All Time High

Ishan Pandey: Hi Emmanuel, welcome to our series “Behind the Startup.” Please tell us about yourself?

Emmanuel Fenet: Hi Ishan. Thank you for the opportunity! After 20 years in the events industry, mainly on business, finance, and law topics with brands like The Wall Street Journal Europe, the Frankfurter Allgemeine Zeitung, or Les Echos, I met Paris Blockchain Week Forum’s founders, with an aim to create a team and a company around the event to take it to the next level. I immediately shared their vision, which led me to enter this amazing ecosystem full of challenges and opportunities. We now have a fully operating staff - a mix of seasoned professionals and younger Web3.0 natives - to deliver one of the most exciting and cutting-edge events in 2022. I am indeed delighted to be a part of this thrilling ecosystem, having closely followed key changes in Blockchain prior to my position here at PBWS. Looking at my past experiences in the financial sector, decentralized finance and blockchain made perfect sense to me and seemed like the right path forward for this industry. Cryptocurrencies received a lot of media coverage these past years, and there was little to no doubt that they would become prevalent in our marketplace. Excited to be a contributor to the ecosystem, I look forward to helping stakeholders (corporations, individuals, blockchain enthusiasts) of the industry to collaborate, brainstorm, educate, and introduce new talents to the industry.

Ishan Pandey: Can you tell us a little bit about the Paris Blockchain Week 2022 and elaborate on what exactly is the vision behind hosting such an event?

Emmanuel Fenet: The Paris Blockchain Week Summit is a blockchain event gathering over 3000 participants, 70 sponsors, 250 speakers, and 100 media partners. PBWS aims to offer workshops on traceability, utilizing blockchain on the innovation journey, digital governance, and innovations conducted in 2021/2022, as well as the liquidity of digital assets.

Renowned speakers from leading blockchain and digital asset firms will discuss their personal experiences and perspectives on the sector, providing a unique perspective on the ecosystem. We really want to educate individuals on the blockchain, while creating meaningful exchanges that will benefit this ecosystem. Innovation in this sector is fast, and our event is a great opportunity to learn more about where the industry is headed.

We aim to become the main global go-to-event for blockchain in the long term. The recent pandemic highlighted a need for individuals and corporations to have meaningful exchanges about the ecosystem. Even if most interactions throughout the year are done online, PBWS is an excellent way for stakeholders to meet, collaborate and brainstorm.

Ishan Pandey: The much-needed amendment to the Financial Action Task Force’s (FATF) guidelines on virtual assets sets out a comprehensive set of recommendations to govern the rapidly developing cryptocurrency market. What is your take on this long-awaited update, and can you give our readers some insight on the same?

Emmanuel Fenet: FATF’s new recommendations released on November 11th provided accurate recommendations to the future of crypto; my main takeaway from these new amendments is that we are moving in the right direction for crypto assets.

Proper cooperation and regulation is the central theme that should constantly be addressed. The most important thing to consider is the fact that the industry is changing much faster in comparison to regulation.

This phenomenon creates a challenging environment for both regulators and market makers. Current laws about crypto taxation, market regulation, and token ownership will have to evolve over time, always adapting simultaneously to technological changes.

Ishan Pandey: The Bitcoin Mining Council (BMC) has recently debuted as an open platform for Bitcoin miners in the wake of an outcry over the volume of fossil fuel-based energy used to mine the cryptocurrency. Do you think this council will really be able to make a difference in terms of protecting the environment?

Emmanuel Fenet: This organization will definitely be useful. Energy consumption caused by blockchain is at the forefront of current concerns, and we must find sustainable ways to implement blockchain on a global scale. Discussing the different alternatives we can have is a definite opportunity to find a way to reduce the energy consumed by different blockchains. Blockchain cannot be fully adopted without addressing this issue in an era where corporations deeply care about carbon emissions.

The Bitcoin Mining Council can make a difference in this manner, and we are all looking forward to their contributions to the ecosystem. More organizations of the sort should be created in the near future, creating a global consensus on the matter.

This problem can be solved but requires the contribution of developers, market makers, and regulators, all working together to address this issue. I have already noticed a lot of change in this manner, as this issue is always mentioned, creating real urgency to find a viable solution. A great example of this would include other organizations such as “ADAN” aiming to develop the French digital asset industry by establishing concrete discussions on regulation, how to protect stakeholders, etc.

Ishan Pandey: Recently, there has been a lot of buzz around the convergence of NFTs with Virtual Reality. What are your views on the Metaverse? Do you think it will destroy the fabric of society?

Emmanuel Fenet: The convergence of NFTs with virtual reality is a definite plus for the ecosystem, allowing these virtual tokens to be applicable in many settings. We are now in an era where non-fungible tokens will have a real and applicable utility. The Metaverse will allow individuals to communicate in a unique way.

It definitely won’t destroy the fabric of society and will just be a tool for people to be more productive, share social experiences, and create new business models for emerging technologies. The Metaverse will be a great path towards digital innovation even in its infancy.

In the meantime, we definitely need to be careful of how this innovation will be conducted and ensure that this industry benefits all sectors, including corporations. Gaming is a great aspect of the Metaverse, but this new form of the web can also be applicable to corporations, facilitating communication between stakeholders.

From a social perspective, this way of thinking can also be applied. The Metaverse will encourage many creators to be part of this adventure, with clear and decentralized access to token ownership. Considering the emergence of decentralized autonomous organizations, we could see many entities established on this structure of governance. Other elements, such as the “play-to-earn” business model is a definite opportunity for many individuals.

Ishan Pandey: The excitement surrounding non-fungible tokens (NFTs), the Metaverse, and decentralized finance (DeFi) pushed the crypto market to soar to new highs. What are your views on regulating DeFi protocols?

Emmanuel Fenet: Indeed! NFTs, the Metaverse, and Decentralized Finance have pushed crypto markets to all-time highs. In the meantime, DeFi protocols should definitely be regulated, but with a clear collaboration between the public sector and market makers.

There ought to be constant communication between both parties to ensure a meaningful exchange, leading to concrete solutions for this ecosystem. We should avoid unnecessary regulation and try to protect all stakeholders in this industry to ensure a clear and constant progression towards democratization. I believe that regulation can be beneficial to the market, but it must be done with an aim to protect, educate, and advance the ecosystem.

Too many mistakes were made in the past where regulations were made without listening to contributors of the industry, resulting in policies that were not beneficial for all parties, including customers. There is no doubt that all stakeholders must be able to transact in a safe manner, but a discussion must take place on how we can actually benefit from this regulation. Regulation in itself should not be perceived as negative, as the emphasis should be made on policies.

We must always try to understand how these policies will impact DeFi protocols and make a decision based on the outcome of these policies. Should market makers bring them after meaningful exchanges, then regulation could really help the industry.

Ishan Pandey: Vodafone is auctioning off its first-ever short messaging service (SMS), which was sent three decades ago, as a non-fungible token (NFT). Despite fears of it being a fad, NFT sales volume increased exponentially. What has led to this sudden boom?

Emmanuel Fenet: We have indeed noticed a sudden boom in NFT sales. The nature of this digital asset is quite special and provides real value to token holders. If we take a close look at the current situation, I have a firm conviction that the interest in NFTs was always there, but the current ecosystem didn’t allow individuals to verify ownership of digital assets. Popular images, songs, and all digital assets of the sort were already quite popular in the early two-thousands.

In essence, digital tokens were issued, but remained fungible (can be copied, without a real possibility of certifying ownership). This sudden boom is mainly due to technological advancements and a real opportunity for ownership. This current market will certainly go through a correction, but NFTs will definitely become the main source of ownership for digital assets.

Current prices observed in our market are based on very high demand. But if we look at the current supply, new digital goods are being built every day, justifying this high demand. I would also argue that the ecosystem is still in its infancy, where community members are trying different things based on consumer demand. This industry will continue to evolve, creating a path towards augmented NFTs, meaning that non-fungible tokens will be applicable to VR settings, such as the Metaverse.

Ishan Pandey: China’s Ministry of Commerce, recently came up with the 14th Five-Year Plan for Service & Trade Industries, which explains how China will integrate blockchain into various areas of trading. Do you think that China’s model of banning cryptocurrency and promoting blockchain is feasible?

Emmanuel Fenet: China’s local initiatives are definitely something interesting to follow. Citizens there have shown a deep interest in cryptocurrencies. Central Bank Digital Currencies are also needed but cannot replace the current crypto market. In the meantime, I would admit that the current administration does a great job of implementing blockchain in all public sectors, working towards faster data and identity management procedures.

The digital Yuan is a success, and there are many things we can learn from China. They are pretty much the first country to fully endorse and adopt digital currencies, creating a safer and reliable financial protocol for their citizens. Eventually, banning cryptocurrencies could only work in the short run, and China will probably re-open the crypto market for its users with appropriate regulation. Banning cryptocurrency and promoting blockchain is feasible but probably not the best way to work towards the democratization of the technology.

If we look at the current crypto ownership worldwide, it’s about 3.9%. China would miss out on a lot of opportunities to promote blockchain, which should be considered. However, I fully support their willingness to protect their citizens, creating regulations that will help the ecosystem. I don’t think this ban is indeed permanent and that things could evolve over time. We’re still in the infancy stage of crypto, and many governments are likely to try different things but will eventually fully adopt crypto in the long run.

Ishan Pandey: According to you, what next trends are we going to see in the blockchain industry?

Emmanuel Fenet: The blockchain industry is booming and should lead us towards mass adoption of corporate blockchain. Blockchain for corporations is a relatively new concept but growing very rapidly as most sectors will benefit from the use of the technology. Real estate, law, supply chain, logistics, healthcare, and so on have shown a real interest in blockchain and are currently exploring this alternative.

NFTs in the Metaverse will also become more and more prevalent, leading corporations to leverage NFTs for marketing purposes. In addition, Central Bank Digital Currencies are likely to be implemented in advanced countries followed by emerging markets.