In the face of escalating regulatory uncertainty in the United States, France extends an invitation to beleaguered cryptocurrency companies looking for a more predictable environment.
French officials are confidently promoting their nation’s regulatory framework, which already hosts approximately 74 registered cryptocurrency firms, a figure poised to rise with the upcoming implementation of the European Union’s Markets in Crypto Assets rules.
A pioneer in crypto regulation
France has taken significant strides in legitimizing the digital asset market. The Secretary General of the Autorité des marchés financiers (AMF), Benoît de Juvigny, asserted France’s leading role in crafting the crypto service asset provider (PSAN) regime in 2019. He stated, “In France, we are proud to be pioneers”.
As such, the country is extending an invitation to American players to benefit from their established regime and the upcoming European arrangements starting 2025.
However, this regulatory certainty in France is a recent development. Earlier this year, proposed legislative amendments that could have stifled innovation were mitigated.
Meanwhile, France and the EU are still deliberating on how to regulate financial services without central entities, and the types of crypto influencers that should be permitted to promote.
Contrasting the U.S. regulatory landscape
The regulatory environment in the U.S. has caused companies like Bittrex and Coinbase to either leave or consider doing so. The active regulatory enforcement, coupled with a lack of clear direction for crypto law from Washington, has created an uncertain landscape.
In contrast, France’s regulatory approach, while complex and stringent, offers a more predictable path.
France’s regulatory framework has already approved 74 companies, including Binance and Bitstamp, demonstrating basic governance and anti-money-laundering compliance.
Despite the regulatory complexity, French officials maintain that the requirements are achievable, dismissing industry complaints about impracticalities and lengthiness of procedures.
France’s attraction to crypto companies
Under newly agreed transitional measures, companies applying from July 2023 will undergo a “reinforced” registration, requiring evidence of robust IT systems and a conflict of interest policy.
The upcoming MiCA regulation, effective from 2025, will further expand to include services such as crypto investment, advice, and portfolio management.
Stéphane Pontoizeau, a director at the AMF, assures crypto firms that they can meet AMF standards. He stressed that companies diligent in studying the AMF’s guidelines could achieve new status in a few months.
It is estimated that around 100 companies will be prepared to commence operations in France before MiCA takes effect.
The stringent regulatory climate of France has its appeal. Circle, a stablecoin issuer, has applied for registration from the AMF and expressed interest in seeking a license.
Teana Baker-Taylor, Circle’s Vice President for Policy and Regulatory Strategy, praised the AMF for being a “forward-thinking” regulator that manages risks effectively.
France, with its robust regulatory framework and willingness to embrace crypto companies, offers a viable alternative for firms seeking refuge from the uncertain U.S. regulatory landscape.
It remains to be seen how many companies will take up the invitation and how this shift might influence the global cryptocurrency landscape.
