Regulations witnessed an elevation this year following the downfall of a plethora of crypto projects. Lawmakers from across the globe were seen either doubling down or preparing new regulations governing the space. While the European Union has been engaging in creating MiCA, the governor of the Bank of France was campaigning for tough licensing laws.
The central bank governor, Francois Villeroy de Galhau, during a speech in Paris said that France should set up mandatory licensing laws. According to Villeroy, the country should enact these laws for local Digital Asset Service Providers [DASPs]. He said,
“All the disorder in 2022 feeds a simple belief: it is desirable for France to move to an obligatory licensing of DASP as soon as possible, rather than just registration.”
The European Parliaments Markets in Crypto Assets bill [MiCA] is still in the works. The licensing regime for the EU would become effective only in 2024. Therefore, Villeroy believes that instead of waiting for MiCA, France should draft its very own set of laws.
At the moment, the Financial Markets Authority [AMF] requires registration from crypto firms offering crypto trading and custody in France. However, a DASP license is voluntary, and those who hold one are obligated to adhere to a number of rules about how firms should be organized, run, and funded.
There are currently 60 AMF-registered crypto firms. None of these have a DASP license.
France’s crypto-friendly status at stake?
Over the last couple of months, France has been putting in place crypto-friendly laws. This lured several crypto firms into the region. However, with other nations setting up more strict laws, France is bound to do the same.
Villeroy wasn’t the only one seeking better licensing laws. An amendment to the law was put forth by Hervé Maurey, a senator from the finance commission. This change negates the law that would allow registered crypto firms to operate locally without a complete regulatory license until 2026.
He even stated that the failure of FTX prompted this move.
“The FTX collapse was a detonation that contributed to a moment of reckoning and awareness. This led a number of players within the French system to consider that things needed to be supervised more tightly.”