France is looking to tighten its crypto-currency registration rules next January. This national program for digital currencies will receive the endorsement of the French National Assembly and Senate.
A special legislative committee has agreed on the text of the registration rule. The next step is to obtain Senate approval, a process scheduled for February 16. After Senate approval, the text will also have to be approved by the French National Assembly later this month.
France has been explicit in its plans for the prospective registration requirements that crypto-currencies will have to comply with by next January. The memo was released Friday by a committee of lawmakers from both houses of parliament. However, it should be noted that the proposed registration requirements did not garner the expected interest from the French Senate.
Newly-applied companies in France’s growing crypto space must meet additional requirements under new registration proposal
The new French registration proposal suggests that companies applying to conduct crypto-currency operations for the first time must meet additional rules. According to a text from the joint legislative committee, these rules concern internal controls, cybersecurity as well as conflicts of interest. However, while the current requirements appear to be thorough, they are better than the previous, highly restrictive position adopted by the French Senate. That position required new applicant companies to apply for a license. So far, no operator has received a license, which shows how tedious the process can be. The search for a crypto license in France currently involves checks on financial resources and business conduct.
Under French crypto-currency regulations, companies can register with the Autorité des marchés financiers. This registration would serve as proof of compliance with basic money laundering and governance standards.
The president of the Crypto ADAN advocacy group comments on the evolution of French crypto-currency legislation.
According to ADAN president Faustine Fleuret, the strengthened crypto regulations are a more pragmatic approach than the French Senate. However, she also warned that an included requirement that calls for sophisticated and secure computer systems could pose some problems. In Ms. Fleuret’s view, these obstacles could be difficult for small businesses to overcome and for regulators to control effectively.
Last year, Senator Hervé Murray proposed strengthening French crypto-currency rules following the sudden implosion of FTX in November. At the time, Murray noted:
“FTX’s recent collapse has highlighted the risk inherent in any investment in crypto assets, particularly when the company operates outside of any regulation.”
In addition, this proposal was also intended to plug any loopholes that might abide by the new European Union rules. These rules, known as the Regulation of Cryptographic Asset Markets (MiCA), were agreed to last October by a consortium of European councils.
According to the Council of the European Union, the European Commission and the European Parliament, the bill aims to get explicit information about crypto projects. In addition to increased transparency about crypto activities, crypto-currency issuers must publish a revealing “crypto asset white paper.” In addition, the bill also requires stablecoin companies to meet capital requirements.