France is on the verge of passing strict licensing laws for crypto firms
The French National Assembly has voted to legislate stricter licensing rules for new cryptocurrency firms to harmonize local laws with proposed EU standards.
The vote was passed with 109 votes (60.5%) in favor to 71 (39.5%) against. Since the French Senate has already passed the bill, it will now be sent to President Emmanuel Macron who has 15 days to either approve it or send it back to the legislature.
If passed, the new law would oblige France-based cryptocurrency service providers to comply with stricter anti-money laundering rules, show customer funds are segregated, follow new guidelines for reporting to regulators and provide more detailed disclosures of risks and conflicts of interest as a means of strengthen consumer protection.
However, the content of the bill will not apply to the 60 crypto firms registered with the Financial Markets Authority (AMF), the country’s financial supervisory authority. These firms will continue to comply with the AMF’s rules until the likely adoption of the EU’s own crypto regulations with the Markets in Crypto-Assets (MiCA) bill.
The stricter rules will therefore only apply to crypto firms that register from July 2023 onwards.
Among the 60 AMF-registered companies is Binance, which recently began piloting in-store payments in France with cloud-based payment platform Ingenico via Binance Pay.
The legislative push for stricter licensing rules was initiated by Hervé Maurey, a member of the French Senate’s finance commission, who proposed an amendment to eliminate a clause allowing crypto companies to operate without a full license until 2026 in a parliamentary session last December .
Bank of France chief Francois Villeroy de Galhau also pushed the agenda in a Jan. 5 speech to members of the financial sector in Paris.
Related: Bitcoin Business in France: Regulation, Education and Frustration About Cash Purchases
Like many regulators around the world, Villeroy de Galhau cited the need to respond to the recent turmoil in the cryptocurrency market as the motive behind the bill, which he wants to take effect “as soon as possible.”
While the MiCA is likely to serve as the blueprint for the regulation of cryptocurrency markets in the EU, he added that France simply could not wait for the more comprehensive laws enacting the licensing regime for digital asset providers (DASPs).
The EU will finally vote on the MiCA regulation in April after two postponements. A successful outcome is likely to see the long-awaited crypto laws come into effect sometime in 2024.
