French lawmakers have voted for new proposed laws that establish a stricter regulation regime for digital assets. The new laws require virtual asset service providers (VASPs) to maintain robust cybersecurity, anti-money laundering, and asset segregation programs, but is a let-off from the initial proposed regulatory regime.
Reports of the new laws surfaced two weeks ago, with the Senate voting for the draft bill on February 16. The National Assembly followed suit on February 28, with lawmakers voting 109-71 in favor of the new regime.
✅ Projet de loi DDADUE dans les domaines de l’économie, de la santé, du travail, des transports et de l’agriculture | Adoption par l’Assemblée nationale, compte tenu du texte de la commission mixte paritaire.
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— Assemblée nationale (@AssembleeNat) February 28, 2023
The bill is now with President Emmanuel Macron, who has two weeks to either sign it into law or veto it and send it back to parliament. Macron has voiced his support for strict regulations in the past, including the Markets in Crypto Assets (MiCA) framework, and many expect him to sign the bill into law.
The new laws are a step down from the regulations initially proposed by Senate Finance Commission member Hervé Maurey in December. On the back of the FTX collapse, the legislator proposed that VASPs be required to obtain a full license before serving French investors.
In France, VASPs can operate if they register with the financial watchdog, the Autorité des Marchés Financiers (AMF). This registration is fairly easy, and so far, 60 VASPs have registered. However, obtaining a full license is much more onerous and would involve many of the checks the AMF applies to traditional financial institutions.
The new laws will require VASPs to meet moderate standards, such as having robust AML and cybersecurity programs. They must also segregate user funds and provide more detailed risk and operations disclosures.
If Macron signs the bill into law, it will take effect mid this year.
While this draft bill will potentially be a big step for the French digital asset industry, the biggest shakeup will be from the looming MiCA framework. MiCA, set to face a vote in April, will greatly impact stablecoins, NFTs, digital asset exchanges, and other VASPs. It will require greater transparency, asset segregation, advanced custody solutions, and introduce a universal licensing regime for EU countries.
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