France is set to revamp the regulatory framework for cryptocurrencies, which could trigger the industry’s growth. The French National Assembly has voted in favor of rules that will make the licensing requirements easier for cryptocurrency companies while extending relief to the sector.
French parliament supports easing of crypto licensing laws
French lawmakers have supported the amendment of the current crypto regulatory framework. The lawmakers supported a change to a proposal tabled by Senator Daniel Labaronne, which allows companies offering digital asset services to register with the financial regulatory body.
These lawmakers want crypto firms to register under the guidelines contained in the comprehensive regulation for cryptocurrencies by the European Union. The vote received a majority of 61 in favor, and it will now enable crypto firms to obtain the needed licenses.
In December, Senator Herve Maurey proposed an amendment seeking a higher-tier licence that would distinguish crypto firms from other companies. The amendment was tabled at around the same time the FTX exchange filed for bankruptcy with more than $8 billion owed to investors.
The Labarrone proposal seeks to support the crypto industry’s growth and not inhibit it. Therefore, he proposed that the amendment removes the need for crypto companies to have a higher-tier license. Instead, firms offering crypto services in France should register with the Financial Markets Authority and comply with Markets in Crypto Assets (MiCA) regulations.
Some requirements that crypto companies must comply with include governance, segregating funds, and reporting to regulatory bodies. The crypto firms that have already taken measures to comply with anti-money laundering guidelines will sustain operations until around 2026 when MiCA laws are likely in full effect.
EU imposes strict rules for banks holding crypto
While France wants to attract more crypto activities, lawmakers in the European Union have come up with a provision requiring banks holding cryptocurrencies to comply with strict guidelines.
The Economic and Monetary Affairs Committee at the European Parliament is tightening the capital requirements for holding digital assets. Under the new guidelines, banks operating in the EU will be mandated to hold one euro of their capital for each euro they hold in cryptocurrency.
The lawmakers have also reiterated that cryptocurrencies are highly risky assets, explaining why the new measures and guidelines targeting banks were needed. One of the European parliament members, Markus Ferber, noted that these strict capital requirements would ensure that the unstable nature of the crypto industry does not spill over to the financial world.
The changes will also impose a cap on the number of unbacked assets, such as Bitcoin and Ethereum, that lenders can hold. These requirements will remain in place until the European Commission formulates additional rules.
The regulatory framework for crypto assets is changing in the European Union and around the world. The collapse of FTX has led to many regulators seeking more ways of protecting investors.
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