France: CACEIS Bank receives approval to offer digital currency custody service

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CACEIS Bank, the asset arm of Santander and Crédit Agricole, has confirmed the approval to provide digital currency custody services in France ahead of the application of new registration requirements.

The approval was granted by France’s Autorite des Marches Financiers (AMF) on June 20, following a lengthy scrutiny of CACEIS’ application. The new offering will allow the firm to offer digital currency custody services to institutional clients without mentioning a future retail offering.

In line with its long history of interacting with institutional clients, CACEIS’ offering will also include holding the private keys of its customers. At press time, details of any partnerships with blockchain infrastructure firms remain sparse, suggesting that the CACEIS may be building its platform from scratch.

CACEIS is no stranger to custodial services for institutional clients, holding over $5 trillion in assets under custody while assets under management exceed $2.6 trillion. According to its website, the firm offers fund administration for insurance companies, brokers, real estate funds, and asset managers.

Keen on broadening its horizons, CACEIS is taking the plunge into digital currencies, with pundits commenting on the timing of its custodial license. CACEIS clinched its registration ahead of the launch of a new set of rules in July for digital currency service providers in France.

Under the incoming rules, service providers will be expected to comply with stiffer anti-money laundering rules and provide a clear separation of clients’ funds. The new rules are designed to bring licensing requirements in line with the incoming European Union’s Markets in Crypto-Assets (MiCA) legislation.

It appears that the new rules will not apply to the over 60 firms granted licensing by the AMF, but despite the seeming soft stance, the regulator is ramping up enforcement actions against erring firms.

The AMF has been investigating Binance’s subsidiary in the country for violating Know Your Customer (KYC) rules which could lead to a suspension of its license.

Influencers get a soft landing

Following the implosion of FTX in 2022, French lawmakers sought to tighten the screws for the digital currency industry by proposing to regulate the use of influencers in promoting digital currency products.

In the initial draft of the proposed bill, only licensed digital currency service providers could engage the service of influencers. Despite 60 firms registered with the AMF, no firm has received licensing, triggering concerns over applying the proposed rule change.

In May, French legislators changed their stance to allow only firms registered with the AMF to hire the services of influencers to promote their services.

Watch: Patrick Prinz discusses BSV blockchain adoption in Europe