France is pushing for major changes to how cryptocurrency companies are regulated within the European Union. They’re basically saying they might block companies licensed in other EU countries from operating in France.
A Centralized Approach
This move comes from France’s financial watchdog, who’s worried about inconsistencies in how different EU countries are applying the new crypto rules (called MiCA). They believe a central regulator, the European Securities and Markets Authority (ESMA), should be in charge of all major crypto firms. France, Italy, and Austria are all on board with this idea.
The “Atomic Weapon”
France’s watchdog even threatened to challenge the validity of licenses issued by other EU countries – a big deal that could disrupt the current system where a license in one country allows a company to operate across the EU. They’re calling this a potential “atomic weapon.” The concern is that some companies are “regulatory shopping,” choosing countries with easier licensing processes.
Concerns and Proposed Changes
This push for stricter rules follows an ESMA review that found some countries weren’t properly assessing the risks before licensing crypto firms. While some countries like Luxembourg and Malta are already granting licenses to big names like Coinbase and Gemini, France, Italy, and Austria want MiCA to be tougher. Their proposed changes include:
- Stricter rules for crypto activities outside the EU.
- Better cybersecurity measures.
- Improved management of new digital asset offerings.
Resistance and the Road Ahead
While ESMA’s head also supports expanding their power, not all EU countries agree. This means getting everyone on the same page about crypto regulation will be a tough fight.