French senator Hervé Maurey has proposed tightening crypto regulations.
France reportedly has 50 registered companies that operate without a license.
The senator's proposal would compel companies to obtain a license from the French regulator.
The world amended their crypto regulation. In line with this, Hong Kong and Canada announced last week that they would strengthen crypto regulations to prevent future occurrences similar to FTX.
Not just these two countries, but according to a Financial Times report, France is under mounting pressure to address gaps in its crypto regulations. Currently, France offers an opportunity with less regulatory oversight to attract cryptocurrency startups.
The reports noted that Senator Hervé Maurey of the Finance Commission is apparently planning to amend the existing crypto regulation. The amendments include the prohibition of registered crypto companies from conducting domestic business without a complete regulatory license until 2026.
The report comes as the European Union also plans to fully adopt Markets in Crypto-Assets (MiCA) regulations in 2024. However, France intends to uphold its current regulatory framework in place for another 18 months.
In France, Digital Asset Service Providers (DASPs) are required to register and comply with AML/CFT regulations. However, the registration does not appear to require a license. Reports noted that France currently has 50 registered companies, all of which are functioning without a license.
This clearly indicates why France is considered as one of the top twenty crypto economies, comfortably ranking among the most "business-friendly" countries.
As per reports, 3.4 million people, or 5.0% of France's total population currently own cryptocurrency. However, these numbers have been greatly affected by the ongoing crypto winter, particularly the FTX collapse.
FTX's bankruptcy has destroyed several other businesses that had direct or indirect exposure to the exchange. Furthermore, investors have lost billions of dollars, prompting regulators to tighten crypto regulations.
In response to the current situation, Hervé Maurey told Financial Times,
“The FTX collapse was an explosion that contributed to a reckoning and awakening. This prompted a lot of players in the French system to believe that things needed to be more closely monitored.”
Meanwhile, the amendment, which was proposed by the Senate on Tuesday, will be reviewed by France's parliament in January 2022. If approved, the Senator's proposal would compel businesses to obtain a license from the French regulator, the Autorité des Marchés Financiers (AMF), from October 2023.
What are your thoughts on Hervé Maurey's proposed amendments? Will other crypto-friendly countries also amend their respective crypto regulations? Share your thoughts in the comment section below.
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