France seeks to expedite the mandatory licensing of crypto service providers. The country’s objective is to force crypto companies into obtaining a license if not already registered.
The call comes straight from France’s Autorité des marchés financiers (AMF) or Financial Markets Authority, the country’s financial regulator, and is in line with Banque de France. Its Governor Villeroy de Galhau insists on enforcing stringent regulatory requirements on crypto businesses in the country.
The licensing, according to Villeroy, should replace the existing registration process to address the industry’s prevailing volatility challenges.
The AMF optional licensing system came into effect in 2019. Over 50 firms applied for AMF registration, and well-known global players in the field, including Binance, the world’s largest crypto exchange, were among the applicants.
The apparent “disorder” in 2022 in the crypto space, for Villeroy, is a sound reason for this policy drive and moreover is “desirable for France to move to an obligatory licensing of DASP as soon as possible.”
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Licensing has to happen before MiCA, the Europe-wide crypto regulations, come into effect by 2024, as clarified by Marie-Anne Barbat-Layani, the head of AMF, the financial body responsible for overseeing the crypto space in France,
Along the same line, Villeroy de Galhau urged the authorities not to be reluctant about commencing with the licensing of Digital Asset Service Providers even before the EU regulations take effect.
Inspite of the constraints, Barbat-Layani insists that licensing would not imply throttling innovation in the sector. Instead, it would attempt to resist fraud.
At present, cases where registration with the AMF is mandatory include providers willing to offer digital asset custody services, and services pertaining to the buying or selling of digital assets in a currency that is legal tender, trading of digital assets against other digital assets, operating a trading platform for digital assets, etc.
However, the lower chamber of France’s parliament is yet to discuss the bill that advocates for making licensing mandatory. If it gives greenlight to the said bill, crypto service providers with business interests in the country will have no option but to register with AMF and obtain appropriate licenses to operate within France’s boundaries.
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