France’s Regulatory Measures on Cryptocurrency Firms
France is contemplating measures to prevent cryptocurrency firms that hold licenses from other European nations from operating within its borders. This move is a response to concerns regarding the regulatory inconsistencies in the European Union’s newly implemented framework for cryptocurrency—a development raised by France’s financial regulatory authority, the Autorité des Marchés Financiers (AMF).
Concerns Over EU’s Markets in Crypto-Assets Regulation
In a statement to Reuters, AMF Chair Marie-Anne Barbat-Layani expressed skepticism about the potential loopholes in the EU’s Markets in Crypto-Assets Regulation (MiCA), which represents the first comprehensive regulatory scheme for cryptocurrencies worldwide.
The AMF fears that some crypto enterprises may prefer to obtain licenses from more lenient EU jurisdictions and then attempt to operate across the single market, exploiting these regulatory discrepancies.
Barbat-Layani acknowledged the complexity of the situation, likening the matter to an “atomic weapon” that could have significant implications for the industry.
“We do not exclude the possibility of refusing the EU passport,”
she stated, emphasizing the need for a cohesive regulatory approach in light of these concerns.
Implementation Timeline and Broader Implications
MiCA, which grants authorized cryptocurrency service providers the ability to operate throughout the EU based on a single member state’s license, is set to be fully enacted by December 2024. However, this broad access has prompted fears that uneven regulatory standards could undermine its intent and efficacy.
Call for Enhanced Oversight
In a related development, France has joined Austrian and Italian counterparts in advocating for the European Securities and Markets Authority (ESMA) to oversee major cryptocurrency firms. The collective request arises from a position paper which highlights a need for stricter regulations concerning crypto operations, especially those taking place outside EU borders.
These countries are also calling for enhanced cybersecurity measures and a reevaluation of the regulations governing new token launches.
Scrutiny of Malta’s Regulatory Practices
This renewed push for oversight comes amid growing scrutiny of Malta’s regulatory practices, particularly following an ESMA review that criticized the Malta Financial Services Authority’s (MFSA) handling of crypto service provider authorizations. The review found that the MFSA had only “partially met expectations,” leading to suggestions that it improve its monitoring of new applications and supervisory protocols.
Critics have voiced concerns regarding Malta’s licensing regime, highlighting the urgency for a uniform standard in the EU’s burgeoning crypto landscape.
