The governor of the Bank of France has demanded stricter regulations concerning the licensing of crypto companies operating in France in view of the current disruption affecting the crypto market.

On January 5th, Francois Villeroy de Galhau spoke at an event in Paris and urged France not to wait for EU regulations regarding cryptocurrencies to pass before enforcing mandatory licensing of digital asset service providers (DASPs) in the country. 

It looks like the European Parliament's Markets in Crypto Assets (MiCA) bill, which provides a crypto-licensing structure, might not be implemented until potentially 2024. French Central Bank Governor François Villeroy de Galhau suggested that the state move towards compulsory licensing of digital asset service providers (DASPs), instead of simple registration, as quickly as possible.

Presently, crypto businesses that operate in the country and engage in trading or custodial activities must be registered with the Financial Markets Authority (AMF). It is optional, but not mandatory, to obtain a DASP license; if obtained, the businesses must abide by a range of regulations around their organization, operations, and funding. Although there are currently 60 firms registered with the AMF, none of them are licensed as a DASP.

Villeroy reached out following the suggestion of Hervé Maurey, a member of the Senate finance commission, to eradicate an agreement that permits businesses to conduct without any license in December. Laws that exist in France currently permit businesses to function without a license up until 2026, regardless if MiCA is approved and a licensing system is established. Parliamentary discussions about the amendment are scheduled to start in January.

MiCA has been on its path to gaining approval from the EU Parliament since September 2020. On October 10th, it was passed by the European Parliament Committee on Economic and Monetary Affairs after discussions between the EU Council, the European Commission, and the European Parliament. However, the conclusion of the final plenary vote for MiCA was postponed from late 2022 until February, with Stefan Berger, a Member of the European Parliament, articulating in November that the delay was caused by the colossal amount of work that had to be done by the lawyers/linguists due to the size of the legal text.



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