France has taken a significant step towards implementing new cryptocurrency regulations, with the National Assembly voting in favor of stricter licensing rules for crypto firms. The move aims to bring French laws in line with anticipated European Union (EU) standards and bolster the country’s reputation as a crypto hub.
The final vote tally saw 109 Assembly members supporting the bill and 71 against, following a milder version of the legislation than initially proposed, following pressure from the crypto industry. The French Senate has already approved the bill, which will now be sent to President Emmanuel Macron, who will have 15 days to approve or reject it.
The proposed rules would require French companies offering crypto services to attain a more robust registration than currently offered by the Financial Markets Authority (AMF). The new regulations aim to ensure compliance with governance standards, rules on fund segregation, and guidelines for reporting to regulators, among other provisions.
While many of these provisions overlap with the EU’s anticipated regulatory framework, France’s new regulations are expected to take effect well before the EU-wide legislation, which is expected to pass a final European Parliament vote in April. The proposed regulations will apply to companies registering from July 2023 onwards, with existing registered companies being allowed to continue operating until the end of the transition period in 2026.
The push for stronger regulations was initially proposed by Senator Hervé Maurey in December following the collapse of the FTX crypto exchange. While the industry feared the proposal would be damaging, regulators supported the move.
Following lengthy discussions, both the French National Assembly and Senate have agreed on a compromise proposal to tighten regulations for cryptocurrency firms. The proposal will introduce stricter registration requirements from January 2024, but companies will not be required to obtain a license.