French lawmakers have adopted a softened approach to crypto licensing in the country, giving operators more time to meet new Europe-wide standards.
Members of the National Assembly voted through an amendment proposed by centrist politician Daniel Labaronne last night, which will allow existing crypto firms to continue operating without a full license until the European Union’s landmark crypto regulations are brought into force.
France currently has a two-tier regime for crypto firms. All operators must register as crypto asset providers, but they do not have to gain a full license, a process that requires higher levels of disclosure. While around 60 providers have registered with the regulator Autorité des Marchés Financiers (AMF), none have opted for full authorization.
The amendment does, however, require any new entrants to the market to gain a full license if they launch in 2024 or later.
By adopting the amendment, lawmakers rejected an earlier amendment proposed in December by Senate member Hervé Maurey. Maurey’s proposal would have required these players to start the process of gaining full authorization this year.
The move would have sped up French crypto’s adoption of new higher standards that are set to be imposed by the EU’s Markets in Crypto Assets (MiCA), likely by 2026.
“This is a pragmatic decision aimed at striking the right balance between the flourishing of innovation in France and the safe environment for users in which it must necessarily take place,” Faustine Fleuret, President and CEO of French crypto industry association Adan, told Decrypt via email. “It is also a message to the sector about the exemplary nature and professionalism expected of the players on this path towards harmonization of European regulations."
Labaronne, who proposed the latest amendment said that, although the bankruptcy of FTX had underlined the need for investor protection, more time was needed to implement tighter rules.
Crypto in France
The passing of Labaronne’s amendment marks the end of several weeks of intense discussions between lawmakers and the crypto industry in France, a country that has so far fashioned itself as a haven for cryptopreneurs.
Binance CEO Chanpeng “CZ” Zhao, whose crypto exchange was greenlit in France in May 2022, said that the country “is very uniquely positioned to be the leader of this industry in Europe."
Crypto firms like Binance and Crypto.com will now have a bit more breathing room until MiCA is enforced.
The EU package of regulations, which is intended to unify the approach to crypto across the 27-country bloc, is expected to go to a vote this year.
If passed, the rules will then take another 18 months to be enforced.