The head of the central bank of France has said that a licensing regime needs to be adopted in the country for crypto service providers.
The executive said that tightening regulatory oversight has become a must considering the ‘disorder’ that the crypto industry has seen in the last year.
Stricter regulation
Francois Villeroy de Galhau, the Governor of Banque de France, has stated that stricter regulatory requirements should be introduced for governing crypto businesses.
Currently, the crypto companies operating in France are required to register their business, but the governor insists that a licensing regime should be introduced for these firms instead.
De Galhau also asserted that Paris should not wait for the upcoming European Union regulations that are in process to come into effect.
He said that they should act even before that and make it mandatory for Digital Asset Service Providers (DASPs) to reach out to the French government for obtaining a license before they can operate in the country.
So far, there are more than 60 platforms that have been registered with the Autorité des Marchés Financiers (AMF) for providing crypto services in the country.
This is the financial markets authority of France and global firms like Binance, which is the biggest crypto exchange in the world, have also registered with it.
Licensing
Under the current laws, it is optional for companies to obtain a license due to which there are no digital asset service providers that have actually obtained a license in France.
Villeroy de Galhau spoke on Thursday to a representative of the financial sector and said that the disorder that took place in the crypto space in 2022 shows that obligatory licensing should be introduced.
He said that instead of registration, France should take steps to introduce mandatory licensing for digital asset service providers in the country.
The process
It should be noted that there are certain standards that have to be met by digital asset service providers before they can be granted a license by the AMF.
These standards are applicable to the financial resources available, organization as well as business conduct.
The proposal from the governor comes after member states and key institutions of the EU came to an agreement last summer on the Markets in Crypto Assets (MiCA) legislation.
They also agreed to a new set of anti-money laundering (AML) that would be applicable to the crypto industry.
The new regulations are expected to go into effect this year, but a time period of 12 to 18 months will be granted to businesses to come into compliance with it.
Brussels is also looking to make it obligatory for platforms that process crypto transactions on behalf of EU residents to report them to the Union’s tax authorities.
Nonetheless, there is still time until these regulations go into effect and the governor of the central bank of France does not want to wait that long.
He believes that given the situation in the crypto market, it is necessary to introduce regulations quickly.
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