Banque de France Governor Francois Villeroy de Galhau has floated the idea of requiring crypto businesses to obtain a full license even before the upcoming EU regulations come into force next year.
The central bank chief is backing some lawmakers’ proposal that would remove a grace period the country offers to crypto platforms.
“All the 2022 disorders feed on a simple belief: it is desirable that France move as soon as possible to a compulsory license of DASPs, rather than a simple registration,” said de Galhau.
The Governor of the Banque de France has called on lawmakers to start working on new crypto regulations to protect the financial system after the collapse of the FTX exchange.
Currently, more than 60 crypto platforms are allowed to operate in the country without full licenses until 2026, which means they can provide their services with minimal controls. The new proposal would require companies to obtain a full license from the Autorité des Marchés Financiers (AMF), starting in October.
The governor of France’s central bank has said the country needs to update these tougher rules with the Crypto Asset Markets (MiCAs), which the European Parliament will likely vote on later this year.
“The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto assets, especially when the company operates outside of any regulation. These concerns, including for financial players, are shared at European Union level,” he writes.
A member of the Senate Finance Committee also said the country needs to reconsider its streamlined licensing regime for digital asset providers. Hervé Maurey, who chairs the Land Use Planning and Sustainable Development Committee, has proposed an amendment to current legislation to remove a clause allowing crypto platforms to operate without a full regulatory license.
The highly controversial Crypto Asset Markets Bill, or MiCA, includes a 12-18 month adaptation period to prepare for the new laws being put in place, meaning the laws could come into full effect early 2024 at the earliest. The EU-wide regulatory framework will grant passporting rights to crypto businesses working across the continent.
European Central Bank President Christine Lagarde also called on MiCA II to regulate activities related to staking and lending of crypto assets. The term refers to a complementary legislation building on the work lawmakers did for the original bill.