French Financial Regulator Responds to EU’s Crypto Consultation

Published at: April 9, 2020

As the European Commission finished its public consultation on cryptocurrency assets in March, France’s major financial regulator stepped in to express its stance on the matter.

The Autorité des Marchés Financiers (AMF), the stock market regulator in France, has published an official response to the EC consultation, outlining some basic proposals regarding their own vision for crypto assets within the EC’s approach.

It’s too early to establish a classification of crypto assets

In an April 7 statement, the AMF argued that the classification of crypto assets should be based on the existing categories in order to differentiate between crypto assets that qualify as financial instruments and those that do not.

According to a report by Finance Magnates, the AMF also noted that it is still too early to establish a precise classification of crypto assets. The regulator reportedly defines any crypto asset as a “digital asset that may depend on cryptography and exists on a distributed ledger.”

A spokesperson at the AMF confirmed to Cointelegraph that the authority believes that it is not the right time to give a strict classification to crypto assets at the moment, stating:

“The AMF considers that giving a precise classification applied to crypto-assets could be premature at this stage. It is only after solid feedback that we will be able to judge the relevance of a precise classification (e.g. “utility tokens”, security tokens”, “payment tokens”, “stablecoins” etc.)”

At the same time, the representative also pointed out the importance of defining crypto assets in a broad sense at EU level, in order to provide a “level playing field between entities regulated at national level and those who are not subject to any regulation in their home country.”

AMF raises concerns over global stablecoins

Alongside remarks regarding the classification of crypto assets, the French regulator also proposed to adopt specific provisions for stablecoins — a type of cryptocurrency that is designed to maintain a stable market price through a peg to another asset or basket of assets.

Echoing France’s opposition to Facebook’s proposed Libra digital currency, the AMF outlined its concerns over the impact of the stablecoin on the economy. The regulator wrote:

“This proposal would allow a regulatory framework to apply to any stablecoin regardless of its size [...] However, this requires the ability to draw a line between stablecoins which would be concerned by mandatory requirements and other payment tokens only partially covered by mandatory requirements.”

Additionally, the AMF expressed its supportive stance toward the creation of an interbank settlement asset in central bank money to facilitate delivery-versus-payments processes on-chain. In the official notice, the regulator also proposed to create a digital lab at the European level to test security token-related projects in order to overcome the regulatory obstacles.

France is testing its central bank digital currency

The EC launched its public consultation for establishing a European framework for markets in crypto assets on Dec. 19, 2019. Open until March 19, 2020, the consultation aims to provide clarity to the classification of crypto assets as well as outline potential uses of crypto and blockchain technology in order to promote digital finance in Europe.

French authorities have been paying close attention to crypto and blockchain-based developments so far. On March 30, France’s central bank officially launched a program to test the integration of a central bank digital currency for interbank settlements. Earlier in March, the AMF announced that it was considering a regulatory sandbox meant to study the impact of security tokens in the European Union.

Tags
Regulation
Bitcoin Regulation
Cryptocurrencies
Government
Law
Digital Asset
Europe
Aml
European Union
Related Posts
MiCA is already stifling stablecoin adoption in the EU
The digital asset landscape in the European Union is evolving ahead of the passage of the Markets in Crypto-Assets (MiCA) regulation framework that aims to instill regulatory clarity around crypto assets. While well-intentioned, the current structure of MiCA may throttle innovation. But if a revised version of this policy passes, it could see the European Union become one of the leaders in the digital payment space. If not, then there is a genuine possibility of the continent falling behind. MiCA aims to set a regulatory framework for the crypto asset industry within the EU. At this point, much still needs …
Regulation / Sept. 25, 2022
The 'Brussels Effect' wields real influence over US crypto regulation
The right to privacy is enshrined in many legal traditions around the world. In the United States, it’s protected by the Fourth Amendment; in the European Union, it falls under Article 8 of the European Convention for Human Rights. While definitions differ between jurisdictions, most of us have a right to a reasonable expectation of privacy for our correspondence, in our homes and about our persons. In the 1970s, businesses, families and individuals started generating data like never before, and the degree to which it fell under existing privacy mandates was increasingly unclear. This proliferation of data was first acknowledged …
Regulation / Sept. 30, 2022
Why the latest EU Anti-Money Laundering rules targeting crypto crime make compliance key
When the European Union’s Sixth Anti-Money Laundering Directive comes fully into force on June 3, every company that provides financial services to cryptocurrency customers and businesses will have to comply with much tougher regulations about when and how they identify customers. Strictly speaking, the 6AMLD has been in force since December 2020, but crypto service providers outside the EU have another two months to come into full compliance. This means all e-wallet providers and digital asset exchanges — among others — that have any European customers will need to be registered with EU authorities and perform stricter Know Your Transaction, …
Technology / April 26, 2021
Report: EU to Discuss Further Crypto Regulation Amid Concerns About Lack of Transparency
Economic and financial affairs ministers from the European Union’s (E.U.) 28 member states will reportedly hold an informal meeting on the challenges posed by digital assets and the possibility of tightening regulations, Bloomberg reported August 29. According to a draft note seen by Bloomberg, participants will discuss a general lack of transparency and the potential for cryptocurrency to be used for tax evasion, terrorist financing and money laundering at a September 7 meeting in Vienna, Austria. The European Securities and Markets Authority (ESMA) has previously warned customers about Initial Coin Offerings (ICOs), citing a lack of investor understanding and problems …
Bitcoin Regulation / Aug. 30, 2018
EU Parliament can outlaw transacting with 'unhosted' wallets, crypto advocate warns
Less than a week after a potential ban on Proof-of-Work (PoW) digital assets was dropped from the EU’s prospective MiCA framework, a new threat to the crypto industry could be emerging in the European Union. This time, it is non-custodial, or unhosted, wallets that are in regulators’ crosshairs. On Thursday, March 31, the European Parliament Committee on Economic and Monetary Affairs will vote on an anti-money laundering (AML) regulatory package that seeks to revise the current Transfer of Funds Regulation (TFR) in a way that extends the requirement of financial institutions to attach information on the transacting parties to crypto …
Regulation / March 28, 2022