France is about to enact strict licensing regulations for cryptocurrency firms.
109 people voted in favour of the measure, and 71 people opposed it. The measure now needs president Emmanuel Macron’s signature to become law.
In order to align local legislation with proposed European Union (EU) norms, the French National Assembly has voted in favour of enacting stiffer licensing requirements for new bitcoin businesses.
109 votes, or 60.5%, were cast in favour, while 71 votes, or 39.5%, were cast against. The measure has already been approved by the French Senate, and it is now in the hands of President Emmanuel Macron, who has 15 days to either sign it or resend it to the legislature.
In order to strengthen consumer protection, the new law would require France-based cryptocurrency service providers to follow more stringent anti-money laundering regulations, demonstrate that customer funds are segregated, follow new reporting requirements for regulators, and provide more thorough risk and conflict of interest disclosures.
However, the 60 cryptocurrency companies registered with the Financial Markets Authority (AMF), the country’s financial authority, would not be subject to the provisions of the measure. These businesses will continue to abide by AMF standards until the Markets in Crypto-Assets (MiCA) bill, which is likely to succeed, establishes the EU’s own crypto legislation.
So, only cryptocurrency enterprises that register starting in July would be subject to the harsher regulations.
Binance, which recently started testing in-store payments in France using the cloud-based payment platform Ingenico via Binance Pay, is one of the 60-AMF registered businesses.
Hervé Maurey, a senator from the French Senate’s finance committee, presented an amendment in December to remove a provision allowing cryptocurrency companies to operate without a complete licence until 2026, sparking a legislative campaign for stronger licencing regulations.
François Villeroy de Galhau, governor of the Bank of France, promoted the cause in a speech to representatives of the financial industry on January 5.
Villeroy de Galhau cited the necessity to respond to the current turbulence in the cryptocurrency market as the driving force for the measure, which he wants to go into effect “as quickly as feasible,” like many other regulators across the world.
He continued that while MiCA would probably serve as the model for regulating the cryptocurrency market in the EU, France simply couldn’t wait for the more comprehensive rules establishing the licencing regime for suppliers of digital asset services.
After two delays, the EU is now scheduled to vote on the MiCA law in April. If the conclusion is favorable, the long-awaited crypto legislation will probably go into effect sometime in 2024.