The blockchain is one of the technologies to watch in the years to come. It could revolutionize many sectors of the economy, starting with banking and insurance.


  • Definition of the blockchain
  • The bitcoin blockchain
  • The Ethereum blockchain
  • Private blockchain vs public blockchain
  • The consortium blockchains
  • The blockchain in France

 The blockchain is the new buzzword in the world of technologies. All sectors are starting to focus on concrete use cases, but few actors can boast of having developed revolutionary solutions. For good reason: blockchain technology is still very complex to understand.

Definition of the blockchain

The blockchain is a technology that can store and transmit information transparently, securely and without a central control body. It looks like a large database that contains the history of all the exchanges made between its users since its creation. The blockchain can be used in three ways: for the transfer of assets (currency, securities, shares …), for better traceability of assets and products and to automatically execute contracts (“smart contracts”).

The great feature of the blockchain is its decentralized architecture, that is to say, it is not hosted by a single server but by some users. There is no intermediary so that everyone can check the validity of the channel itself. The information contained in the blocks (transactions, title deeds, contracts, etc.) is protected by cryptographic methods that prevent users from modifying them afterward.

The bitcoin blockchain

Bitcoin is the best-known use case of the blockchain. It was created in 2008 by a stranger whose pseudonym is Satoshi Nakamoto. It designates both a secure and anonymous payment protocol and a cryptocurrency. Anyone can access this blockchain (it is public, so open to all) and therefore use bitcoins. To do this, simply create a virtual wallet, downloadable on the app stores. Cryptocurrency makes it possible to buy goods and services and can be exchanged for other currencies.

Some platforms offer the conversion of dollars, euros or yuan into bitcoins. This is the case of Paymium, a French start-up that allows bitcoins to be exchanged for euros. Bitcoin has a very volatile price. It can increase or decrease by 20% in just two days. This volatility is linked to the strong speculation around this currency and the absence of a regulatory authority. 

In early December 2017, the price of bitcoin exceeded for the first time the  $ 15,000.It has risen by more than 1000% since January 2017. Faced with this surge, the Autorité des marchés financiers (AMF) and the French Prudential Supervisory Authority (ACPR) have warned investors about the risks associated with insolvency. ‘bitcoins purchases. “This valuation may just as well collapse in the same way. The purchase/sale and the investment in bitcoin are currently being carried out outside of any regulated market, and investors are therefore at risk of loss. Very high in the event of a downward correction and do not benefit from any guarantee or protection of the invested capital, “the two regulators said in a statement. These latter would be more and more solicited by savers on this subject. via their call centers. In Japan, the Bitcoin has been recognized as legal tender on 1 st April 2017. The capitalization of the first crypto-currency reached $ 191 billion in November 2017.

The Ethereum blockchain

The Ethereum blockchain has become as popular as bitcoin. Created in 2014, Ethereum also uses its own cryptocurrency: ether. Its price is lower (about 460 dollars at the end of November 2017) than that of bitcoin but its capitalization reached 99 billion dollars on the beginning of January 2018.

Capitalization and prices of the world’s top ten cryptocurrencies beginning of January 2018

Unlike bitcoin, which allows only simple transactions (mainly payments),  Ethereum goes further. It makes it possible to run “smart contracts”, autonomous programs that automatically execute actions validated beforehand by the stakeholders. Ethereum and these smart contracts are of interest to banking and insurance players as well as the legal professions. In the future, these players will be able to certify property transfers more securely or automatically pay compensation. Axa was the first insurer to release insurance based on the blockchain. In September 2017, he launched a automated insurance for aircraft flight delays. Based on the Ethereum blockchain, this insurance is actually a “smart contract”, a smart contract that triggers an automatic refund once the delay has been found. This Fizzy offer was developed with the start-up Utocat, which publishes a platform to accelerate the design of blockchain prototypes.

Banks side, many projects are underway. For example, UBS and IBM have launched an initiative to develop a blockchain-based trade finance platform. Known as Batavia, this technology would allow banks and their customers to automate this process, which is still very manual and done on paper. Concretely, Batavia will track a transaction from the departure of the goods until it arrives at the port of destination. A pilot should see the day in the first quarter of 2018.

Another example: BNP Paribas and the firm EY have set up a private blockchain pilot to improve the functioning of the internal treasury of the French bank. The project, which is being tested on transactions between Paris and New York, allows extending the operating hours up to 11 hours more per day (instead of 7 to 10 hours currently).

Private Blockchain versus public Blockchain

What differentiates the private blockchain from the public blockchain is its degree of openness. The public blockchain can be viewed and used by everyone.Everyone can send them transactions and expect them to be registered in the registry (if they follow the rules of this blockchain). This is the case of blockchain Bitcoin and Ethereum. In the private blockchain, an organization can modify the protocol whenever it wants. Nobody can participate without being authorized but everyone can consult it. Private blockchains are widely used by financial institutions to experiment internally. They can also connect different information systems that do not speak well within the same organization.

The consortium blockchains

The blockchain “consortium” groups together several actors who have rights and decisions are made by the majority of actors. For example, a dozen financial institutions could agree and organize a blockchain in which a block should be approved by at least 8 of them to be valid. So it’s very different from the private blockchain and the public blockchain. Not only are the participants in the approval process limited and selected, but the majority rule is no longer required. This hybrid blockchain is a real advantage for the financial sector players because they operate in regulated environments and are obliged to know the identity of the participants (which is not the case in the public blockchain). The best-known blockchain consortium is R3. It has about 70 financial institutions including BNP Paribas. In May 2017, he raised 107 million euros.

Legal framework of blockchain in France

In France, the blockchain has a legal definition since the ordinance of April 2017 relating to certificates of deposit in the context of the creation of securities issued by a company in return for a loan granted on a crowdfunding platform. This order amends Article L 223-12 of the Monetary and Financial Code, which defines the blockchain as a “shared electronic recording device allowing the authentication of specific securities transactions, intended to be exchanged on crowdfunding platforms. : the minibons “.

At the beginning of December 2017, the Council of Ministers adopted an order allowing the transfer of ownership of certain financial securities via the blockchain. It’s a first in Europe. The order should come into effect no later than January 1, 2018. “The use of this technology will allow Fintech and other financial players to offer new solutions for securities trading, faster, cheaper solutions, more transparent and safer, “said the Minister of Economy and Finance, Bruno Le Maire. A decree in Council of State must specify the conditions of use of the blockchain in this specific context, as well as the terms of collateral securities.

The text, drafted by the Directorate General of the Treasury proposes adjustments to certain articles of the monetary and financial code, namely that certain financial securities can be registered on the blockchain (and not only on securities accounts). This orientation meets the expectations of start-up blockchain who had told the JDN not want too heavy regulation. He also proposes to create two new articles in the Monetary and Financial Code. The first specifies which securities may be listed in the blockchain: negotiable debt securities, mutual fund units or shares, equity securities issued by corporations and debt securities other than securities of the blockchain. Negotiable debt “provided that they are not traded on a trading platform.” The second article indicates that these securities will be governed by French law “when the registered office of the issuer is located in France or the issue is governed by French law.”