France may require crypto businesses to obtain a full license to align the country’s legislation with forthcoming EU rules.
Currently, crypto companies do not need a formal license to operate in France until 2026. However, Sen. Hervé Maurey of the Finance Commission proposed an amendment that would do away with that grace period.
The latest plan passed last week and will go to the French parliament the next year. According to it, crypto businesses will have to get licenses starting October 2023. This is timed to coincide with a vote in the European Parliament on the Markets in Crypto Assets (MiCA) regulation in 2023.
Maurey opined that the recent bankruptcy of FTX has shown the dangers of investing in crypto assets, especially when the company in question is not subject to any regulation. The European Union shares these worries, especially those related to the banking sector.
Under the current two-tier framework in France, businesses must register as providers of digital assets. Although some 60 providers have registered with the agency overseeing the financial markets, none have opted for full permission.
The restrictions imposed by MiCA under Maurey’s idea will be on par with those of the more comprehensive optional authorization approach. His plan would bring businesses into line with EU laws by eliminating the option for a simple registration and requiring them to obtain an exclusive license.
Binance and Crypto.com are just two of the many successful businesses that have set up branches in France over the years. However, if the legislature passes the proposed law, it could damage the country’s reputation as a cryptocurrency-friendly nation. Local crypto lobbying group Adan informed the Financial Times that the issue with FTX indicated that the government was abandoning its goal of being the center of European cryptocurrency.