Licensing Is Now Mandatory For Crypto Firms: Bank Of France
After a lawmaker proposed harmonizing the country’s legislation with incoming EU regulation, France may compel crypto companies to obtain a full license to operate in the country.
As of now, the regulations permit cryptocurrency businesses to function there until 2026 without a formal license. According to the current proposal, companies would have to apply for a full license from the financial authority beginning in October. In doing so, it would be brought into compliance with the EU’s Markets in Crypto Assets (MiCA) regulation, which the European Parliament will likely vote on in 2023.
The reason for this is the recent bankruptcy of FTX, which has emphasized the risks inherent in any investment in crypto assets, especially when the company works outside of any regulation.
Bank of France Regulator Urges Tougher Regulatory Requirements
Francois Villeroy de Galhau, Governor of the Bank of France, has suggested stronger regulatory standards for crypto businesses, which could be a blow for an industry seeking a greater footing in Europe. Villeroy said that given the recent volatility in the market, France should impose licensing requirements on Digital Asset Service Providers (DASPs) without waiting for European regulations to take effect.
Villeroy said Thursday in a speech to the financial sector in Paris that, “All the disorder in 2022 feeds a simple belief: it is desirable for France to move to an obligatory licensing of DASP as soon as possible, rather than just registration.”
Full Digital Asset Service Provider (DASP) licensing is currently optional in France, and no French companies have secured a full license. Roughly 60 organizations have secured a less extensive “registration” from the country’s Financial Markets Authority (AMF).
One of those companies is Binance, which was granted authorization to operate in France in May.
Binance in Europe
Binance, a cryptocurrency exchange, operates throughout Europe from its headquarters in Paris, France. In May of last year, it received regulatory authority to function in France as a Digital Asset Service Provider.
Since then, “CZ,” the CEO of Binance, has stepped up his operations at the country’s crypto exchanges and met with authorities to pledge compliance with rules and anti-money laundering laws. He even referred to France as Europe’s centre for cryptocurrency.
However, with increasingly stringent rules in place, Binance and other similar companies will be obliged to comply, and this may have an impact on its operations.
France not the first to introduce regulations
However, apart from France, many other nations have enacted laws governing cryptocurrencies that are considerably stricter. While several other nations, including Russia, China, and Turkey, have outright prohibited it, Bitcoin trading is not permitted in Egypt without a Central bank license.
Introducing laws can have benefits such as increasing legitimacy and customer protection, but it can also have drawbacks such as stifling innovation and limiting freedom since it was designed as a decentralized form of currency.
California Assembly Passed Crypto Licensing Bill, Now Awaits Governor’s Signature – Coinpedia – Fintech & Cryptocurreny News Media
The California assembly has passed a crypto regulating bill that now requires cryptocurrency-related businesses to gain a special license to offer services to users in California. The crypto bill is now in the final process of becoming law in California.
California Is Aiming For Crypto Regulation
On Monday, California Assembly member Timothy Grayson produced the bill, AB 2269, with support from the Consumer Federation of California with a 71-0 majority. The crypto bill will establish the Digital Financial Assets Law in California.
The Digital Financial Assets Law is known as California’s “BitLicense.” A simple pen stroke is left to create a full-fledged law in California. The bill now requires Governor Gavin Newsom, who has until 30 September to sign or veto the bill. California will become one of the first states to require crypto platforms to obtain a special license to offer services in the state.
What Does This Crypto Bill Say?
The crypto law will tighten crypto regulations and bring more transparency to the crypto industry in California. If the governor signs the bill, it will take effect from 1 January 2025. Companies of digital-asset exchanges will get license approval from the state’s Department of Financial Protection and Innovation.
The Department will also be allowed to enforce drastic actions against those who are unlicensed. A non-licensed corporation engaging in digital financial asset business activity will be charged a civil penalty of up to $100,000 daily. Furthermore, if a licensee breaks the rule, they will have to pay a fine of $200,000 for each day of violation.
Stablecoin issuers holding securities as a reserve must have a total amount of stablecoins not less than the amount of all outstanding stablecoins sold or issued in the United States.
Tim Grayson stated, “While the newness of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else.”
Regulators and governments are framing crypto space. Crypto bill provides the user with more closure looks of the crypto space. However, The California BitLicense now completely depends on the governor whether to sign it or not.