The Need for Change

In light of the recent upheaval in the cryptocurrency world, the governor of the Bank of France, Francois Villeroy de Galhau, has a burning message: it’s high time for France to tighten the reins on cryptocurrency companies. During his spirited speech in Paris on January 5, he asserted that the nation shouldn’t linger for the impending European Union crypto laws before mandating licensing for digital asset service providers (DASPs).

What’s the Delay?

Currently, the European Parliament is busy with the Markets in Crypto Assets (MiCA) bill, which aims to establish a robust licensing framework. Unfortunately, this legislative juggernaut isn’t expected to roll out until at least 2024—a timeline that Villeroy believes is far too leisurely given the current chaotic conditions in the crypto markets.

The Current State of Crypto Licensing

As it stands, crypto businesses in France must merely register with the Financial Markets Authority (AMF). However, this lightweight requirement means that while they can engage in crypto trading and custody services, none of the 60 AMF-registered firms have actually obtained a DASP license. And what’s the difference? A DASP license isn’t just a badge—it comes with stringent compliance demands that would likely keep the rogue operators at bay.

A Legislative Push

The call for more stringent standards isn’t just Villeroy’s solo act. The proposal gained momentum following an amendment from Senate finance commission member Hervé Maurey, who suggested eliminating the loophole that allows firms to operate unlicensed until 2026—even when MiCA takes effect.

The Road Ahead

The discussions regarding this amendment are slated to kick off in January. As the EU gears up for debate, Villeroy reminded industry leaders of the lessons learned from the disarray of 2022, pushing for France to step up its game. Will the country’s financial architects respond? The crypto crowd is waiting with bated breath—hopefully not while holding their digital wallets!