France Financial Regulator Weighs Up “Fast-Track” Options to Aid Compliance With EU Passage

Jimmy Aki
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Due to the current European Union transition to a complex crypto regime, the French financial regular considers a possible “fast track regime” for existing registered crypto companies to enable smooth compliance with MiCA.

France’s New Crypto Regulations

French Financial Market Authority (AMF) mulls a “fast-track” option for licensed crypto platforms to get regulated under the upcoming European Markets in Crypto-Assets (MiCA) laws.

As detailed in the statement published on April 21, the AMF approved the MiCA’s proposed new set of laws and expressed how this new set of regulations will proceed for a transitory period of eighteen months.

AMF asserts to take up the position as a “guide” to ensure a smooth transition of all pre-existing and potential crypto exchanges and firms to MiCA regulation.

The requested compliance from the French providers of digital asset services (PSANs) towards MiCA is geared towards filling the gap of arising crypto-centric events.

Following the collapse of FTX, France recently tightened its regulations toward crypto-centric firms, which was closely followed by the liquidation of crypto-friendly financial and investment banking firms such as Silver Gate and Silicon Valley in the United States.

The European Parliament publicly voted in favor of the MiCA regulatory package on April 20, closely followed by an effective implementation exercise around July 2023.

In light of this development, AMF cited there might be a consideration of a possible “fast track licensing modular” between existing cryptocurrency organizations and MiCA, which features much tougher governance, financial stability, and consumer protection rules.

The French regulator further stated that companies already registered and licensed in France, such as Binance and Bitstamp, will be offered a grace period of eighteen months to comply with the new European rules.

These platforms can, during this period, offer their optimal services to French residents.

However, there was general agreement that the new regulation would be fully integrated in 2025, with a clear, concise, and consistent regulatory framework for all European Union member states.

Prior to the introduction of MiCA, France provided two licensing options for crypto exchanges; a Simple and an Enhanced option.

The Simple option offered more relaxed requirements, while the Enhanced, which the government favors, is stricter and somewhat similar to MiCA regulations.

The Enhanced option integrated tight controls that scrutinize anti-money laundering rules, customer asset custody, detailed provision of risk and conflict of interest disclosures, and reports to regulators.

With MiCA yet to take its course, all AMF-licensed crypto platforms and organizations in France will remain under the regulation of the Simple option before porting to MiCA.

Notably, the AMF stated that crypto firms that register after the grace period would have to do so under a more stringent option.

The Spate of Tighter Crypto Regulations Globally: A Threat to Longevity?

Since the invention of the first and original cryptocurrency, Bitcoin, in 2008, the crypto market has transitioned into a fast-rising force.

The crypto market cap is currently valued at $1.14 trillion, down from $3 trillion a year ago due to the recent steep bearish fall in price valuation.

The precipitous downtrend has propelled global financial risk even during economic hardship.

The rise of crypto exchanges and series of unregistered securities have birthed high volatility of crypto assets due to baseless speculations and rung and pool, which have substantially increased the risk of insolvencies in the financial industry.

This development has led to the biggest global liquidations, such as the Celsius Network, FTX, Silver Gate, and Silicon Valley, triggering a contagion in the overall crypto ecosystem.

The downsides of the financial sector’s supposed “digital sector” have, rather, been a major player in fraud, money laundering, and many more, hence the spate of regulations.

With the United States of America being hit the hardest, the European Union remains committed to preventing a recurrence, as evidenced by the implementation of MiCA regulations.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.