Following the trend of global jurisdictions to amend crypto regulations, the governor of the French central bank highlighted the urgent need for strict crypto regulations in the country.
When expressing his thoughts in a speech made in Paris on January 5, the governor of the Bank of France, Francois Villeroy de Galhau, pointed to the constant market volatility as the reason and insisted on implementing a compulsory licensing system “as much as possible. .”
The recent crash of FTX in November last year worsened the situation in the crypto industry. In addition to changing investors’ views on virtual assets, the turmoil in the crypto market caused by the collapse of exchanges has led many countries to implement stricter regulations.
In 2020, the European Union decided to prepare a comprehensive crypto rule to meet the ongoing need for crypto regulation. However, the Markets in Crypto Assets (MiCA) bill is expected to be implemented in 2024. Therefore, European crypto companies can operate legally without obtaining a license until the MiCA regulations are implemented and provide a licensing regime.
FTX Aftermath Leads France to Create Strict Crypto License
In addition, the French financial chief wants to remove this clause and recommends that every crypto company obtain a DASP license to operate in France.
He noted in a statement:
All disorders in 2022 feed believe simple: it is desirable for France to move to a compulsory license DASP as soon as possible, instead of just registration.
While waiting for the MiCA standard, obtaining a Digital Assets Service Provider (DASP) license was optional in France at the time. The EU Parliament exempts crypto companies from licensing until 2026 when EU crypto rules will provide for a new licensing regime.
This is what the governor wants to change, considering the mismanagement of crypto platforms that led to bankruptcy. In addition, about 60 crypto companies have registered with the financial market authority, but have not yet obtained a DASP license.
In particular, obtaining a DASP license will make crypto companies reveal more in-depth business information, eliminating risks. A DASP license requires a platform to report financial information, actions, and business to government agencies.
The French Finance Commission Proposes Amendments In December 2022
The governor is not the first to criticize the clause that allows crypto companies to run their businesses with minimal regulatory interaction. Seeing the FTX crisis, Hervé Maurey, a member of the Senate finance commission, has proposed in December last year to remove the clause that allows crypto service providers to operate with little regulatory interaction until 2026.
Speaking to the Financial Times in mid-December, Hervé Maurey pointed out the need for stricter crypto regulation and noted in the statement:
The collapse of FTX is a detonation [that] contributing to a moment of reckoning and awareness,” Maurey told the Financial Times. “This has led some players in the French system to consider that things should be monitored more strictly.
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