Cryptocurrencies: what is the future of bitcoin in Monaco?

Brock Pierce, president of the Bitcoin Foundation, has big plans for the Principality. "I think Monaco should adopt bitcoin like El Savaldor," he said at the last meeting of the Ritossa family office. The Central American country has adopted bitcoin as the main currency on June 9, attracting much criticism, particularly from the IMF.

But Brock Pierce argues it's reasonable. He argues that adopting bitcoin would be a pragmatic decision for Monaco. "Bitcoins represent about 300 million people with about $ 2 trillion in wealth," he says. “When bitcoin reaches $ 100.000, most of the world's billionaires will be bitcoiners. It is quite significant. And if you are Munich, it is probably a good idea to join it ”.

Bitcoin: a large digital casino?

The position of the Monegasque banks is quite different. Hervé Ordioni, general manager of Edmond de Rothschild-Monaco, commented during an interview on Brock Pierce's suggestion as "a decision (which) seems to go deeply against the interests of the Principality".

“As the president of the bank Edmond de Rothschild, François Pauly said, for the moment bitcoin is like a large digital casino. Personally, I agree with that line of thinking ".

Frédéric Geerts, managing director of Rothschild Munich, is more diplomatic. While admitting that “finance is evolving”, he also stresses that “neither Monaco nor the family banks will be innovative in this sector. Monaco is a small nation with a cautious disposition, which above all wants to protect its residents. In the Principality, therefore, a bitcoin revolution is not planned.

Bitcoin: Is the Problem Energy?

Beyond the instability of cryptocurrency, there is the question of the energy impact of bitcoin mining. According to the University of Cambridge's Bitcoin Electricity Consumption Index, bitcoin use currently consumes around 80 terawatt hours of electricity per year, which is roughly Finland's annual energy consumption.

However, Brock Pierce argues that to criticize bitcoin's energy use is to misunderstand the situation. “We used whale oil for energy,” he explains. "If we had kept this method long-term, not only would we have wiped out the whales, but we would have quickly run out of energy."

His theory? Bitcoin's energy demands will push us to find new sources of energy. As we enter the digital age, our need for energy will be the main driver of the transition to renewable energy, ”he says. 

Blockchain, an advantageous technology

Despite his numerous criticisms, Hervé Ordioni admits that cryptocurrencies have their advantages. Between them? Blockchain, a technology created thanks to Bitcoin that makes financial transactions safer, as well as more transparent. “In the long run, states are more than likely to turn traditional currencies into euro cryptocurrencies, cryptocurrencies, etc. integrating blockchain technologies into the official currency ”, underlines Hervé Ordioni.

In the Principality, therefore, the possibility of setting up cryptocurrency transaction platforms should not be excluded, "in particular for those that have already obtained accreditation from the supervisory authorities in the countries where they are already located, including France, Switzerland and Luxembourg".