6 February 2023

Bank of France Governor Calls for Mandatory Licensing for Crypto Companies

Bank of France Governor Calls for Mandatory Licensing for Crypto Companies

France has to adopt a licensing regime for crypto service providers, the head of the country’s central bank has suggested. According to the executive, the need to tighten regulatory oversight stems from the “disorder” in the industry throughout the past year.

Licensing Should Replace Registration for Crypto Firms in France, Governor Galhau Says

Banque de France Governor Francois Villeroy de Galhau has urged for subjecting crypto businesses to stricter regulatory requirements. Licensing must be introduced instead of the current registration in response to the recent volatility in the sector, he insisted.

De Galhau also thinks that Paris should not hesitate but act even before the upcoming EU regulations take effect and make it obligatory for Digital Asset Service Providers (DASPs) to obtain licenses from the French government, Bloomberg reported.

Around 60 platforms working with cryptocurrencies have so far registered with the Autorité des Marchés Financiers (AMF), France’s financial markets authority, including global players such as Binance, the world’s largest crypto exchange.

Licenses are still optional and there are no licensees yet among the digital asset service providers registered in France. Speaking to representatives of the financial sector on said Thursday, Villeroy de Galhau stated:

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.

Digital asset service providers which want to be granted a license are required by the AMF to comply with certain standards in terms of organization, available financial resources and business conduct, the report notes.

The governor’s proposal comes after last summer key EU institutions and member states reached an agreement on the new Markets in Crypto Assets (MiCA) legislation and achieved consensus on a set of new anti-money laundering rules for the industry.

The regulatory package is expected to enter into force in 2023 but businesses will have another 12 to 18 months to comply with it. Brussels also wants to oblige platforms processing crypto transactions for EU residents to report to tax authorities in the Union.

Do you think France will introduce a licensing regime for crypto companies before MiCA enters into force? Share your expectations in the comments section below.

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