Following the trend of global powers to change crypto regulations, the governor of the central bank of France shows the urgent need for strong crypto laws in the country.
When expressing his views in a speech he is speaking in Paris on January 5, Banque de France Governor Francois Villeroy de Galhau pointed to the continuation of the stock market as a reason and encouraged the implementation of measures of to issue licenses “as soon as possible.”
The recent bankruptcy of FTX in November last year has worsened the situation in the crypto industry. Along with changing investor views on virtual assets, the chaos in the crypto market caused by the stock market crash has led many countries to impose strict regulations.
In 2020, the European Union decided to prepare a comprehensive crypto law to meet the evolving needs of crypto law. However, it is expected that the Bill Crypto Asset Markets (MiCA) will come into effect in 2024. Therefore, European crypto companies can operate legally without obtaining a license until the MiCA regulation is developed and provides a licensing system.
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FTX Aftermath Makes France a Strong Crypto License
Likewise, the French financial regulator wants to remove this clause and proposes to make it mandatory for every crypto company to obtain a DASP license to operate in France.
He said in a statement: All the chaos of 2022 gives a simple confirmation: it is desirable for France to move as soon as possible to the compulsory licensing of DASP, rather than simple registration. Pending MiCA standards, obtaining a Digital Service Provider (DASP) license is optional in France.
The European Parliament has exempted crypto companies from licensing until 2026, when the EU crypto law will provide a new licensing system.
This is what the Governor wants to change, because of the mismanagement of crypto platforms that caused them to fail. Similarly, around 60 crypto companies have registered with the Financial Markets Authority, but they have not yet received a DASP license. Obviously, obtaining a DASP license will force crypto companies to disclose more detailed transaction information, thereby eliminating risks.
The DASP license will require a platform to report financial, operational and business information to government agencies.
Changes Proposed by the French Finance Commission in December 2022
The governor is not the first to criticize the clause that allows crypto companies to operate with little regulatory discussion. Seeing the FTX problem, Hervé Maurey, a member of the Senate Finance Committee, already proposed last December to remove the issue that allows crypto service providers to work with limited regulatory discussions until 2026.
Speaking to the Financial Times in mid-December, Hervé Maurey highlighted the need for strong crypto regulation and said in a statement:
The failure of FTX was an explosion [that] contributed to the period of awareness and awareness, “Maurey told the Financial Times. “This made many players in the French system think that it is necessary to organize things properly.