France votes in favour of legislating stricter licensing rules for new crypto firms
The new law being proposed would not affect the 60 crypto companies that are already registered with the French financial regulator
The French National Assembly has approved stricter licensing regulations for new crypto companies to align with the proposed European Union standards.
The bill has already passed the French Senate and now awaits the approval or rejection of President Emmanuel Macron within 15 days. The vote in favour of the bill had 109 votes (60.5 percent), and 71 votes (39.5 percent) were against it.
If the new legislation is approved, crypto companies operating in France would be required to follow more stringent anti-money laundering regulations, demonstrate that client funds are kept separate, conform to updated guidelines for reporting to regulatory bodies, and disclose potential risks and conflicts of interest in greater detail. These measures aim to enhance consumer protection.
The new law being proposed would not affect the 60 crypto companies that are already registered with the French financial regulator, the Financial Markets Authority (AMF).
These companies will remain under the jurisdiction of the AMF until the expected approval of the Markets in Crypto-Assets (MiCA) bill by the European Union. The proposed stricter regulations would only apply to crypto firms that register with the AMF from July 2021 onward.
Hervé Maurey, a member of the French Senate's finance commission, proposed a legislative amendment in December to remove a clause that allowed crypto companies to operate without a full licence until 2026, which led to the push for stricter licensing rules.
Francois Villeroy de Galhau, the governor of the Bank of France, also supported the push for new regulations in a speech to finance sector members in Paris on January 5. Villeroy de Galhau, like other regulators worldwide, cited the recent instability in the crypto market as a reason for the bill and emphasised the need to implement it "as soon as possible."
Although the Markets in Crypto-Assets (MiCA) bill is expected to become the basis for regulating the crypto market in the European Union, France cannot wait for the more extensive laws that will bring about the licensing regime for digital asset service providers.
The EU is scheduled to vote on the MiCA regulation in April after two delays, and if it is approved, the new crypto laws may come into effect by 2024.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash