France Moneytech Update

France Regulatory Environment

The French Financial Markets Authority (AMF) has called for mandatory licensing rules to be introduced for crypto companies in France to enhance transparency and security in the crypto industry. This move comes despite France already having implemented comprehensive legal frameworks for cryptocurrencies and blockchain technology in 2019.

In May 2019, France passed the Pacte Law, a comprehensive legal framework for cryptocurrency and blockchain technology. The regulation aimed to provide clarity and legal certainty for all actors of the crypto industry, while also supporting the development of the sector in the country. One of the key provisions of the Pacte Law was the creation of a regulatory regime for initial coin offerings (ICOs), a crowdfunding method used by many crypto startups to launch and sell their own currency.

According to a recent Bloomberg report, AMF Chair Marie-Anne Barbat-Layani, has called for mandatory licensing rules to be introduced for crypto companies in France before similar regulations are enacted across Europe. Barbat-Layani expressed support for stricter regulations by stating that mandatory licensing would offer more significant and detailed elements for investor protection. She believes that it is essential to take a quick and decisive move towards stricter regulations to enhance transparency and security in the crypto industry.

In addition, Barbat-Layani emphasized that the new policy would be the best guarantee for the protection of crypto investors, adding that the AMF would remain open to financial innovation. Notably, all French crypto companies, including Binance, which began operations in the country in 2021, have opted for lighter registration rather than obtaining a full license from the AMF. Various French officials, including Bank of France governor Francois Villeroy de Galhau and Senate member Hervé Maurey, have called for mandatory licensing to be introduced. A bill is currently being discussed by lawmakers, and if stricter regulations are not successfully implemented in the near future, they are likely to be enacted in 2026.

The AMF also announced several other initiatives aimed at supporting the development of the crypto industry in France. These include the creation of a digital assets division within the regulator, as well as a partnership with the French central bank, The Banque de France, BIS Innovation Hub Swiss Centre, Swiss National Bank, and a private sector consortium on CBDC Project Jura.

France's Interest Grows for DeFi

France has shown an increasing interest in decentralized finance (DeFi) as a means to innovate and modernize the financial sector, with the country exploring potential use cases and regulations for DeFi. Several French banks and financial institutions have announced plans to enter the DeFi space.

DeFi is a system of financial applications built on blockchain technology that allow users to access financial services without the need for traditional financial intermediaries. The French government has been supportive of the development of DeFi in the country, with Finance Minister Bruno Le Maire stating that DeFi has great potential for the French economy.

One recent example of DeFi in France is the backing of BlockTower's new $150 million venture fund, which aims to invest in cryptocurrency and blockchain startups, by BPI France, a state-owned investment bank. The fund will provide early-stage funding to startups in the cryptocurrency and blockchain space, helping them to develop their products and services. BPI France's investment in the fund reflects the growing interest of French institutional investors in the cryptocurrency market.

Retail crypto adoption initiatives

On February 22, a new pilot program was launched between Binance and French credit card service company Ingenico, allowing in-store crypto payments via Binance Pay. The initial test will run on Ingenico Axium payment terminals in France with two merchants Le Carlie and Miss Opéra, in the hospitality and retail sectors.

Overall, the latest crypto news in France highlights the country's growing interest in the potential of blockchain technology and digital assets. French companies and institutions are exploring new ways to leverage these technologies for economic growth and innovation. As the crypto landscape continues to evolve, it will be interesting to observe how France positions itself as a leader in this rapidly changing field.