France to Hold Debate on ‘Cryptocurrency Licensing’

Paigambar Mohan Raj
Source: CoinDesk

The French National Assembly will hold a debate today on whether cryptocurrency firms will need to follow a strict license regime in the coming year. The development comes after several French officials have called for more severe rules in the country.

French politicians will debate whether to impose mandatory licensing for suppliers of digital asset services. Senator Hervé Maurey, a social liberal, first suggested that firms that deal in digital assets acquire a compulsory license by October of this year. The cryptocurrency sector did not take this well.

The National Assembly will consider two further amendments in addition to Maurey’s. First, there is one that would give businesses extra time by delaying the license date. Second, it would substitute a more straightforward registration for the required license.

Currently, French firms providing cryptocurrency services choose to register with the Financial Markets Authority (AMF) rather than apply for a license. The French government is considering 60 businesses professionally capable and compliant with anti-money laundering rules. The list includes Société Générale, one of the nation’s top financial organizations, and Binance France.

However, to get a full license from the AMF, businesses must obtain liability insurance or a minimum amount of equity and establish internal controls. Firms must also adhere to cybersecurity guidelines in addition to other organizational criteria. No business has a checklist for the entire requirement yet.

Senator Daniel Labaronne stated that the more standard registration procedure may be strengthened with additional consumer protection and corporate control regulations that cryptocurrency businesses would have to follow while being under the AMF’s oversight. In comparison to the high-tier license, these steps would be easier to implement.

Why are French politicians debating on cryptocurrency licenses?

The FTX saga of November 2022 is one of the primary reasons for the unrest among politicians. In a text accompanying an amendment, Maurey wrote,

“The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto assets, especially when the company operates outside of any regulation.”

The leader of the French crypto advocacy organization ADAN, Faustine Fleuret, is concerned that the AMF does not have the personnel to handle the flood of crypto oversight, particularly if the stricter amendments expediting required licensing pass in the National Assembly.