France may stiffen rules for digital asset firms aiming to obtain licenses

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France’s plan to lessen the hurdles that virtual currency firms have to surpass has been scuttled by the recent implosions in the ecosystem, reports Financial Times.

The French parliament is set to cancel the favorable treatment planned for the digital asset industry. Herve Maurey, a member of the French Senate’s finance commission, is pushing for an amendment of a law allowing virtual currency firms to operate in the country without a full license until 2026.

Maurey stated that amending the law was the most viable option following FTX’s ill-fated collapse. He added that “this led a number of players within the French system to consider that things needed to be supervised more tightly.”

If Maurey’s proposal sails through, virtual currency service providers will be required to obtain relevant licenses from the Autorite des Marches Financiers (AMF) starting in October 2023. At the moment, around 50 companies are operating in the country without approval from the AMF, as pundits predict busy days for regulators upon the passage of the amendment.

The Senate has since adopted the amendment, and full parliamentary discussions are expected to commence in January 2023.

Industry coalitions like the Developing the French Digital Asset Industry (ADAN) slammed the amendment proposal as the first step in “abandoning an industry of the future.” Although the move will stifle France’s plan to become the leading European nation in virtual assets, regulators claim it will provide increased investor protection.

France’s positive stance towards digital assets saw Binance mull over choosing the country as its headquarters. French President Emmanuel Macron has been at the fore of the country’s pro-virtual currency stance as he remains keen on creating a tailor-made NFT policy and the “European metaverse.”

FTX ripples disturbing still waters

Around the world, regulators are pivoting from their plans to embrace digital assets following the sudden collapse of FTX. However, Akihisa Shiozaki, a Japanese lawmaker, urged the government not to make a U-turn on plans to lessen restrictions on the industry.

However, jurisdictions like Singapore, South Korea, the United States of America, and Hong Kong are inching forward with even stiffer regulations to prevent a recurrence of the FTX debacle.

Some countries allow firms to operate without obtaining a full license but on the grounds that they sign an undertaking to comply with extant operational rules pending the grant of licenses.

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