After a lawmaker proposed to harmonize the country’s law with incoming EU regulation, France may force cryptocurrency companies to obtain a full license to operate in the country.
As of now, the regulations allow cryptocurrency companies to operate there until 2026 without a formal license. Under the current proposal, companies would have to apply for a full license from the financial authority from October. By doing so, it would comply with the EU’s Markets for Crypto Assets (MiCA) regulation, which the European Parliament is likely to vote on in 2023.
The reason for this is the recent bankruptcy of FTX, which has emphasized the risks inherent in any investment in crypto assets, especially when the company works outside of any regulation.
Bank of France regulator urges stricter regulatory requirements
Francois Villeroy de Galhau, governor of the Bank of France, has suggested stricter regulatory standards for cryptocurrency companies, which could be a blow to an industry seeking a better footing in Europe. Villeroy said that given the recent volatility in the market, France should impose licensing requirements on digital asset service providers (DASPs) without waiting for European regulations to come into effect.
Villeroy said in a speech to the financial sector in Paris on Thursday that “all the mess in 2022 fuels a simple belief: it is desirable that France move to a compulsory DASP license as soon as possible, rather than just registration.”
Currently, the Full Digital Asset Service Provider (DASP) license is optional in France, and no French company has obtained a full license. Approximately 60 organizations have obtained a less extensive “registration” from the country’s Authority for Financial Markets (AMF).
One such company is Binance, which was granted authorization to operate in France in May.
Binance in Europe
Binance, a cryptocurrency exchange, operates across Europe from its headquarters in Paris, France. In May last year, it received regulatory authority to operate in France as a digital asset service provider.
Since then, “CZ”, the CEO of Binance, has intensified his operations on the country’s cryptocurrency exchanges and has met with authorities to commit to complying with anti-money laundering regulations and laws. He even referred to France as the European center for cryptocurrencies.
However, with increasingly strict rules, Binance and other similar companies will be forced to comply, and this may have an impact on their operations.
France is not the first to introduce regulations
However, in addition to France, many other nations have enacted laws governing cryptocurrencies that are considerably stricter. While several other nations, including Russia, China, and Turkey, have banned it entirely, Bitcoin trading is not allowed in Egypt without a license from the central bank.
The introduction of laws can have benefits, such as increasing legitimacy and customer protection, but it can also have drawbacks, such as stifling innovation and limiting freedom, since it was designed as a form of decentralized currency.
This post License Now Mandatory For Crypto Businesses: Bank of France
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