Bank of France calls for stricter crypto regulation

Banque de France governor Francois Villeroy de Galhau has floated the idea of ​​forcing cryptocurrency firms to obtain a full-fledged license even before upcoming EU regulations take effect next year.

The head of the central bank supports the proposal by some lawmakers that would eliminate a grace period that the country offers to crypto platforms.

“All the unrest in 2022 fuels one simple belief: it is desirable for France to move as soon as possible to a compulsory license of the DASP, rather than simple registration,” said de Galhau.

The governor of the Bank of France has called on lawmakers to start working on new cryptocurrency regulations to protect the financial system after the collapse of the FTX exchange.

Currently, more than 60 crypto platforms can operate in the country without a full license until 2026, meaning they can provide their services with minimal controls. The new proposal would require firms to obtain a full license from the Autorité des Marchés Financiers (AMF), starting in October.

France’s central bank governor says the country must adjust these tougher rules with cryptocurrency markets (MiCA), which the European Parliament will likely vote on later this year.

“The recent bankruptcy of FTX has highlighted the risks inherent in any cryptocurrency investment, especially when the company operates outside any regulation. These concerns, also for financial actors, are shared at the European Union level,” she wrote.

A Senate Finance Committee member also said the country needs to reconsider its soft licensing regime for digital asset providers. Hervé Maurey, who chairs the regional planning and sustainable development committee, has proposed an amendment to the current legislation to remove a clause that allows crypto platforms to operate without a full regulatory license.

The much-debated Markets in Crypto Assets bill, or MiCA, includes a 12-18 month adaptation period to prepare for new laws in place, meaning the laws could fully take effect in early 2024 at the latest. soon. The EU-wide regulatory framework will ensure passporting rights for crypto companies working across the continent.

The president of the European Central Bank, Christine Lagarde, has also called for MiCA II to regulate activities related to cryptocurrency staking and lending. The term refers to additional legislation based on the work done by legislators for the original bill.

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