Francois Villeroy de Galhau, governor of the Bank of France, has urged for stronger licencing restrictions for crypto firms in France.
During a speech on January 5, the French governor emphasized that mandatory licensing for regional Digital Asset Service Providers should not wait for upcoming EU cryptocurrency regulations. In addition to existing regulations, the European Parliament’s Markets in Crypto Assets (MiCA) law is expected to take effect in 2024.
Villeroy notably addressed the nation’s banking industry in his speech, making the following comments:
“All the chaos in 2022 feeds a basic belief: France should implement mandatory licencing of DASP rather than merely registration as soon as possible.”
The nation’s market regulator, the Financial Markets Authority, now demands “registration” from crypto businesses that provide crypto trading and custody. Those who have a DASP license are required to conform to a number of laws regulating how firms should be structured, managed, and financed.
The change proposed by Hervé Maurey of the Senate Finance Commission in December 2022 to eliminate a section enabling companies to operate without a license prompted Villeroy’s request.
Bloomberg reports that in France, no DASPs have licenses since such documentation is now voluntary. Around sixty companies have what the French market regulator AMF calls the less restrictive “registration” designation. The recent volatility in the crypto market, according to Villeroy, demonstrates that France needs a licensing requirement.
Due to tougher laws, France may not engage fully in the crypto market. Both the DASP scheme (sometimes referred to as “soft touch”) and the ICO visa program allow for the selling of new tokens. Consequently, France’s policies are now generally seen as crypto-friendly.
Nonetheless, France has a number of strict laws that might hinder the growth of the cryptocurrency business, such as restrictions on cryptocurrency-related advertising and a 30% flat tax on all crypto investment income.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.