A softened approach has been adopted by French lawmakers where crypto licensing is concerned, as they have given operators more time for meeting the standards applicable across Europe.
Daniel Labaronne, a centrist politician, had proposed an amendment that was voted through by members of the French National Assembly.
In accordance with the amendment, existing crypto companies would continue to operate without a full license until the landmark crypto regulations developed by the European Union come into effect.
There is currently a two-tier regime that is applicable to crypto companies in France. While companies are required to register as crypto asset providers, they do not have to obtain a full license.
But, it should be noted that high levels of disclosure are needed in this process. There are around 60 providers who have opted to register with the French regulatory authority AMF.
However, not even a single one has opted to get a full license. According to the new amendment, new entrants in the crypto industry would be required to get a full license if they start operating in 2024 or later.
Lawmakers have adopted this amendment, but an earlier one that was proposed by Herve Maurey in December had been rejected.
The Senate member’s proposal would have meant that crypto companies would have had to begin the process of getting a full license this year.
It would have meant that crypto adoption in France would reach higher standards, which would be imposed in the rest of Europe from 2026 onwards when the Markets in Crypto Assets (MiCA) goes into effect.
The CEO and President of the crypto industry association in France, Adan, Faustine Fleuret said that this decision was a pragmatic one.
Fleuret said that it would have in striking the right balance between ensuring innovation continues to flourish in the country and providing users with a safe environment for trading.
Moreover, it also sends a message to the industry players about the professionalism and exemplary nature that is expected from them in France in order to comply with European regulations.
Crypto in France
Labaronne stated that while FTX’s collapse highlighted the need for regulation in the industry for protecting investors, they needed more time for implementing stricter rules.
The passing of the amendment brings an end to intense discussions that had been happening for several weeks between the French crypto industry and lawmakers.
France has touted itself as a crypto haven. In May 2022, France issued the greenlight to Binance, and its CEO, Changpeng Zhao, said that the country was positioned to become the industry’s leader in Europe.
With the latest amendment, crypto firms, such as Crypto.com and Binance, would have some breathing room before MiCA is implemented in the country.
The package of regulations developed for the EU will go to vote in 2023 and it is expected to unify crypto regulations in the 27-country bloc.
If the package is passed, it will take another 18 months before they go into effect.