France to extend digital currency KYC with new regulations

Getting your Trinity Audio player ready...

France is introducing a raft of new legislation governing the digital currency sector, including tougher Know-Your-Customer rules for digital currency transactions.

The French finance ministry has reportedly been working on proposals for a stronger regulatory regime, which will see crypto-to-crypto exchanges regulated for the first time, as well as more stringent measures for crypto-to-fiat exchanges and other service providers.

Several government ministries recently issued a decree seeking to prevent anonymous digital currency transaction by banning anonymous digital currency accounts. The order, backed by finance minister Bruno Le Maire, overseas minister Sébastien Lecornu and junior economy minister Olivier Dussopt, is pursuant to Article 203 of the PACTE law. Under French law, decrees do not require parliamentary approval, so the measures are expected to immediately become law.

“The government wishes to promote the development of crypto assets under the best conditions of security and attractiveness,” the ministers said.

According to reports, the French government will require two forms of government issued ID will be required for anyone engaging in digital currency transactions from €0 upwards. This contrasts with a €1,000 transaction minimum before KYC is required under current rules.

The rules around crypto-to-crypto exchanges normalize their regulatory standing, bringing them in line with other digital currency exchanges and custodians in France requiring licensing. The statement specifically pointed out the arrests of members of an alleged terrorist cell that was reported to be financing itself with cryptocurrency. In a tweet, Le Maire said, “We must drain the euro from all terrorist financing channels.”

Nous devons assécher au moindre euro tous les circuits de financement du terrorisme.

Avec @SebLecornu et @olivierdussopt, nous avons présenté en Conseil des Ministres ce matin une ordonnance permettant de renforcer la lutte contre l'anonymat des transactions en crypto-actifs. pic.twitter.com/P7ywhoS9Dp

— Bruno Le Maire (@BrunoLeMaire) December 9, 2020

The move comes at a time of increasing regulation of cryptocurrency businesses and transactions by governments worldwide.

See also: CoinGeek Live panel on Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers