The Bank of France’s head said turmoil in the crypto markets proves the need to move to a mandatory licensing scheme for crypto firms “as soon as possible.”
Francois Villeroy de Galhau, the Bank of France’s governor, has urged for more stringent licensing requirements for crypto companies in France, citing the current turmoil in the crypto markets.
During a speech in Paris on Jan. 5, the central bank governor said France shouldn’t wait for upcoming EU crypto laws to enact obligatory licensing for local Digital Asset Service Providers (DASPs).
The European Parliaments Markets in Crypto Assets bill (MiCA) provides a licensing regime for the EU amongst other regulations and is expected to come into force potentially sometime in 2024.
According to a Jan. 5 Bloomberg report, Villeroy addressed the country’s financial industry in his speech, stating:
“All the disorder in 2022 feeds a simple belief: it is desirable for France to move to an obligatory licensing of DASP as soon as possible, rather than just registration.”
Currently, crypto businesses providing crypto trading and custody are required to be “registered” with the Financial Markets Authority (AMF), the country’s market regulator.
A DASP license is optional, with those licensed forced to comply with a slew of requirements related to business organization, conduct and financing.
However, out of the 60 AMF-registered crypto firms, none are currently licensed as a DASP.
The call from Villeroy comes after an amendment was proposed in Dec. 2022 by Senate finance commission member Hervé Maurey to eliminate a clause allowing companies to operate unlicensed.
Current laws in France allow firms to operate unlicensed until 2026 even if, or when, MiCA passes into law and establishes a licensing regime.
Deliberations in parliament regarding the amendment will begin in January.
MiCA has been grinding its way through the EU parliament since Sep. 2020.
On Oct. 10, 2022, it passed the European Parliament Committee on Economic and Monetary Affairs (ECON), 2022 as a result of trialogue negotiations between the EU Council, the European Commission and the European Parliament.
The final Plenary vote for MiCA was rescheduled from the end of 2022 to Feb. 2023. European Parliament member Stefan Berger explained to Cointelegraph in Nov. 2022 the reason for the delay was “the enormous amount of work for the lawyer linguists, given the length of the legal text.”