- France's top financial watchdog said it's too early to precisely classify cryptocurrencies.
- The regulator noted that it could ban stablecoins if necessary.
- A clear distinction between digital "financial instruments" and "electronic money" is needed.
Decrypt’s Art, Fashion, and Entertainment Hub.
France’s top financial regulator, Autorité des Marchés Financiers (AMF), has stated that it’s not ready yet to come up with a precise classification for cryptocurrencies.
According to Finance Magnates, the regulator made its stance clear in response to the European Commission’s consultation. Currently, the AMF defines crypto as “a digital asset that may depend on cryptography and exists on a distributed ledger.”
At the same time, the regulator pointed out that a line must be drawn between cryptos as “financial instruments” and “electronic money.”
“We believe it is important to keep the electronic money regime, which is relevant and should not be undermined by a new regulation. However, it would be useful to work on the articulation between the different regimes,” the regulator stated.
The AMF also voiced its concern over the increasing popularity of stablecoins, adding that authorities could even ban them if the need arises.
“This requires the ability to draw a line between stablecoins which would be concerned by mandatory requirements and other payment tokens only partially covered by mandatory requirements,” the AMF stated.
On the other hand, the regulator also highlighted the potential advantages of initial coin offerings over traditional IPOs, although acknowledged the risks usually associated with this crowdfunding model.
As Decrypt reported previously, France has recently made a big move toward digital euro. Hopefully, the AMF will come up with a precise classification by the time its own country launches its digital currency.