France could re-evaluate its lenient licensing system for crypto service providers in light of the global trend towards tighter crypto regulation amid recent market disasters. That would put the country’s claims to being among Europe’s crypto-friendly nations in jeopardy.
Hervé Maurey, a senator from the French Senate’s finance committee, reportedly proposed a change to remove a provision that permits cryptocurrency companies to function without a complete license until 2026. The French government maintains that this requirement would prevail even after the Markets in Crypto Assets (MiCA) bill is passed in 2024.
The Emmanuel Macron administration is well known for its outspoken support of the digital assets sector. Macron recently began his second term as president. Before the second round of the presidential election in April, Macron voiced his belief in the importance of increasing the nation’s number of tech unicorns, creating an NFT policy, and creating the “European metaverse.” He did, however, also express his doubts about the banking industry’s self-regulation.
The amendment could oblige firms to apply for a license from Autorité des Marchés Financiers (AMF) and only be allowed to operate once they have recieved the license. At least 50 registered businesses are now active in France without an AMF license. An ex-member of the AMF board, Thierry Philipponnat, considers the level of investors’ protection within this regime as “very light if not non-existent.”
“We have always been clear that registered players are very lightly regulated and we have called on investors to be highly vigilant,” said the AMF.
The change will be discussed in Parliament in January 2023 after being approved by the Senate on December 13. The amendment is seen as a sign by the local industry’s organisation, Developing the French Digital Asset Industry (Adan), that French legislators are “abandoning an industry of the future.”
In September, Villeroy de Galhau, governor of the Bank of France said that a wholesale Central Bank issued Digital Currency (CBDC) might considerably help to improve cross-border and cross-currency payments. he mentioned that atutomated market-makers will be deployed to maint the CBDC’s liquidity.
The central banks of France and Switzerland alongside the BIS Innovation Hub conducted the Project Jura experiment in November 2021, over three days. The project studied the efficacy of wholesale CBDCs and the capabilities of distributed ledger technologies in such transactions. Project Jura will look after the issuance and distribution of tokenized bonds and CBDC, as p[er the governor.