France’s ambitions to become Europe’s crypto hub might be in jeopardy as new regulations seem set to bring in tight new rules for crypto start-ups.
With 109 lawmakers in the French National Assembly voting to adopt a package of European Union laws that includes an amendment demanding strict requirements for the grant of new crypto licences.
The proposal was brought forward by French Senator Herve Maurey of the pro-European, center-right, New Center (NC) party.
Crypto actifs: Priorité aux épargnants.
A la veille de l’examen par l’Assemblée nationale du dispositif voté par le Sénat
Retrouvez ma tribune dans Les Échos https://t.co/gaIcy9ASbo
— Herve Maurey (@HMaurey) January 23, 2023
Initially far harsher in tone – with intensely strict requirements for crypto licencing – the proposal received big backlash from industry players and pro-crypto lawmakers.
Divisions led to discussions, and a compromise was reached which will grant amnesty to currently operational French crypto firms until the EU-wide crypto regulations are brought in.
The amended legislation awaits final signatory approval from French President Emmanuel Macron.
France’s two-tier crypto licencing regime set to end
Currently, France operates a two-tier crypto licencing regime – with a simple tier one licence available through local financial regulator L’Autorite des Marches Financiers (AMF).
This is the licenced used by all active France-based crypto firms – including Binance and Crypto.com.
C'était la folie à Strasbourg !
C'était la deuxième étape du #TourDeFranceBinance
Prochaine ville ➡️ Lille
À très vite amis Binanciens pic.twitter.com/G8Id2d3eRJ
— Binance France Officiel (@LeBinanceFR) February 28, 2023
The second tier option – which grants a full licence – requires complete disclosure of business operations.
So far not a single one of the 60 crypto companies registered in France has moved forward to apply for the full second tier licence.
Despite these efforts to establish a straightforward licencing regime, France’s crypto ambitions are now under threat with impending EU legislation set to impose bloc-wide crypto regulations.
Known as Markets in Crypto Assets (MiCA) – the new EU regulatory regime for crypto could head to vote in the European Parliament as soon as April.
However, policy analysts have revealed that it is far more likely to take a number of years to move through the supranational legislature.
This mean French crypto firms could have until 2026 to prepare for compliance with MiCA regulations.
But some French lawmakers fear that the reality of this could mean firms have until 2026 to move operations overseas – potentially putting France’s big bet on crypto to an end.
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