Growing Need for Regulating Crypto in France

France’s Bank Chief Calls For Crypto Licensing

Growing Need for Regulating Crypto in France

It’s not a secret that the cryptocurrency market is highly volatile. Due to this, the Governor of the Bank of France, Francois Villeroy de Galhau, has advocated for building a stronger legal framework for French cryptocurrency businesses, particularly regarding licensing.

His advice is for France to create its own required licensing for local crypto service providers instead of waiting for the EU to adopt the uniform rules. The Markets in Crypto Assets bill is on its way, but seeing as voting has been delayed for a second time, it may take more time for the bill to take effect – some predict 2024 as the year of implementation.

Currently, it is optional to obtain a digital asset service provider (DASP) license, but those that do so must fulfill specific organizational, operational, and financial standards. Despite the fact that there are already 60 crypto companies registered with the AMF in France, none of them have DASP licenses. Continue reading to catch up with what’s happening.

Who Will Be Affected by This Initiative?

The current DASP program is deemed as soft for the current crypto businesses. Moreover, France has an ICO visa program that allows companies that offer utility tokens to the public to enter the French market. So, France’s policies have been fairly crypto-friendly so far, but this could change.

Namely, by implementing stricter regulations, the country and its people may find themselves face-to-face with some barriers when it comes to participating fully in the cryptocurrency market.

Right now, France has one of the highest rates of crypto usage. 16% of French people own cryptocurrency, according to Gemini’s Global State of Crypto 2022 survey. With high-income households, the rate rises to 62%.

Additionally, France is a global leader in promoting gender equality in the cryptocurrency industry, with more than 45% of its users being female. Moreover, 8% of French respondents stated they planned to buy cryptocurrency by the end of the year.

Crypto Usage in France

The number of people that use cryptocurrencies as an investment and a replacement for fiat currencies is growing. The number of French people who hold cryptocurrency and use it to make purchases is rising.

People who use cryptocurrencies spend it on many different things as it is a revolutionary technology enabling simpler and less expensive transactions. The uses vary, and crypto owners not only spend their savings but also seize the chance to make more money with it, whether that’s by trading NFTs or using the assets in online casinos. For the latter, many first turn to sites like to make sure that their digital coins are spent somewhere safe and entertaining.

Nonetheless, a closer look at cryptocurrency transactions reveals that most consumer transactions include the purchase of goods and services. Many businesses are looking to get into crypto as a means of payment to expand their customer base and capitalize on this blossoming industry.

Mixed Opinions on the New Legislation

As cryptocurrencies become widely used in digital services and apps, questions are continuously raised about the future of crypto regulations and their effects, not only in France.

Some business leaders applaud the French government for passing proposals such as the aforementioned one, believing they will reassure clients and businesses of their safety. As more individuals accept cryptocurrency as an alternative asset recognized by the government, the regulations are also expected to encourage the usage of cryptocurrencies.

Small businesses in the crypto industry, however, criticize the time-consuming and expensive licensing processes. They claim that this will impede the country’s efforts to innovate and use cryptocurrency.

Crypto Regulations Worldwide

Cryptocurrencies have given rise to an industry that is constantly increasing and evolving, with new milestones being reached every day. Regulations have proven to be a polarizing subject, as some countries have imposed a complete ban on crypto.

For example, some cryptocurrency exchanges are forbidden in countries like China or Egypt. China has made all types of mining and transactions for cryptocurrencies illegal, tightening its controls on them. Numerous other nations have also made implicit proscriptions against cryptocurrency.

In the EU, the Markets in Crypto Assets bill has been rescheduled time and time again, while in the US, different states have different cryptocurrency legislation and regulations.

The Crypto Future

What changes can be expected in the future when it comes to cryptocurrency? Many countries are making efforts to individually set the legal framework for this field. However, a universal regulatory framework may be a better option as it will bring all countries together on this matter and can help the future of compliance with cryptocurrencies.

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