French central bank governor pushes for crypto licensing ahead of EU laws

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Fran­cois Villeroy de Gal­hau, the Bank of France’s gov­er­nor, has urged for more strin­gent licens­ing require­ments for cryp­to com­pa­nies in France, cit­ing the cur­rent tur­moil in the cryp­to markets.

Dur­ing a speech in Paris on Jan. 5, the cen­tral bank gov­er­nor said France shouldn’t wait for upcom­ing EU cryp­to laws to enact oblig­a­tory licens­ing for local Dig­i­tal Asset Ser­vice Providers (DASPs).

The Euro­pean Par­lia­ments Mar­kets in Cryp­to Assets bill (MiCA) pro­vides a licens­ing regime for the EU amongst oth­er reg­u­la­tions and is expect­ed to come into force poten­tial­ly some­time in 2024.

Accord­ing to a Jan. 5 Bloomberg report, Villeroy addressed the country’s finan­cial indus­try in his speech, stating: 

“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.” 

Cur­rent­ly, cryp­to busi­ness­es pro­vid­ing cryp­to trad­ing and cus­tody are required to be “reg­is­tered” with the Finan­cial Mar­kets Author­i­ty (AMF), the country’s mar­ket regulator. 

A DASP license is option­al, with those licensed forced to com­ply with a slew of require­ments relat­ed to busi­ness orga­ni­za­tion, con­duct and financing.

How­ev­er, out of the 60 AMF-reg­is­tered cryp­to firms, none are cur­rent­ly licensed as a DASP. 

Villeroy speak­ing in Dec. 2017 on a pan­el in Paris. Image: The Jacques Delors Institute

The call from Villeroy comes after an amend­ment was pro­posed in Dec. 2022 by Sen­ate finance com­mis­sion mem­ber Hervé Mau­rey to elim­i­nate a clause allow­ing com­pa­nies to oper­ate unlicensed.

Cur­rent laws in France allow firms to oper­ate unli­censed until 2026 even if, or when, MiCA pass­es into law and estab­lish­es a licens­ing regime.

Delib­er­a­tions in par­lia­ment regard­ing the amend­ment will begin in January.

Relat­ed: French reg­u­la­tor AMF black­lists only 2 cryp­to web­sites in the whole year

MiCA has been grind­ing its way through the EU par­lia­ment since Sep. 2020.

On Oct. 10, 2022, it passed the Euro­pean Par­lia­ment Com­mit­tee on Eco­nom­ic and Mon­e­tary Affairs (ECON), 2022 as a result of tri­a­logue nego­ti­a­tions between the EU Coun­cil, the Euro­pean Com­mis­sion and the Euro­pean Parliament.

The final Ple­nary vote for MiCA was resched­uled from the end of 2022 to Feb. 2023. Euro­pean Par­lia­ment mem­ber Ste­fan Berg­er explained to Coin­tele­graph in Nov. 2022 the rea­son for the delay was “the enor­mous amount of work for the lawyer lin­guists, giv­en the length of the legal text.”

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