French Central Bank Chief Demands Crypto Licensing
Francois Villeroy de Galhau, Governor of the Bank of France, is advocating for stricter regulations on cryptocurrency companies in France. This would be a step ahead of the European Union's MiCA regulation, which is set to create a licensing system for cryptocurrency firms on a European level and will be voted on in February 2024.
During a speech, Villeroy de Galhau 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."
In France, the Financial Markets Authority (AMF), the market regulator, requires cryptocurrency businesses to register for trading and storage services (custody). Obtaining a DASP (Distributed Autonomous Service Provider) license is voluntary, but those who choose to do so must adhere to a variety of requirements regarding their business operations, practices, and financing. Despite this, none of the 60 AMF-registered cryptocurrency firms in France currently hold a DASP license.
In December, Senator Hervé Maurey proposed an amendment to require all cryptocurrency businesses to obtain a DASP license and cited the collapse of FTX as a reason for the need for stricter regulations. It is anticipated that EU-wide rules will make full DASP licensing mandatory by 2026.
France's regulatory environment is generally favorable to the cryptocurrency industry, including the DASP program and the "ICO visa" program for new token sales. However, stricter regulations could limit the country's ability to fully embrace the industry. Several policies exist to discourage the growth of the crypto sector, such as a 30% flat tax on all crypto investment income and restrictions on advertising related to cryptocurrencies.
CBW - External Analyst