France Could Consider Licensing Crypto Companies – A Win for Investors?
Introduction
The increasing rate at which crypto companies are reported as going bankrupt and unable to repay investors’ deposits has caused the different regulatory bodies to tighten the policies guiding all the crypto companies within the country. In the wake of the crash of the FTX exchange, a member of the French Senate finance commission – Herve Maurey has pushed a bill for the amendment of the old laws which gave crypto companies free hand to operate in the country without obtaining a license. He, therefore, called for a revocation of the clause as stated in this old policy permitting the crypto company to operate in France without a full license up to 2026.
Other members of the parliament seem in support of this move and are calling for a new policy to mandate every crypto company to obtain a license before operating in the country. Is this a win for investors today? Will an amendment of the old law now make it possible for investors to make payments using Cardano (ADA) or any other cryptocurrency without fear? This work has examined the major benefits investors stand to gain from the current move towards licensing all crypto companies in France today.
Understanding the current state of cryptocurrency trading in France
France has hitherto maintained the status of one of the most crypto-friendly countries in Europe today. The French President – Emmanuel Macron has always embraced a digital economy and has always worked hard towards positioning the country as the crypto-hub for Europe. Consequently, many crypto companies have thrived in France and have been permitted to operate freely without needing a license.
France’s Senate push for an amendment of the law to ensure all crypto companies are fully licensed
The great vulnerability found amongst crypto companies today has pushed the French Senate to push for an amendment of the previous laws which allowed crypto companies to operate freely in the country without obtaining a license.
The crash of the second largest crypto exchange in the world today known as FTX exchange, has caused regulators to tighten the regulatory policies guiding the crypto companies, to ensure that investors’ funds are duly protected against any future damage.
The motion for an amendment of this law was pushed by the Senate on 13th December 2022 and will further be presented to the parliament for consideration by January 2023.
Similarly, the country is working on implementing new laws that would abolish all forms of anonymity in cryptocurrency transactions. This is based on the perceived increasing cases of terrorist financing and money laundering carried out using cryptos. Several French ministers including the Finance Minister Bruno Le Maire and the overseas Minister Sebastien Lecornu have given their support for the passage of this bill.
Is France’s move for the licensing of Crypto Companies a win for investors?
The current move to ensure that all crypto companies operating in France today are duly licensed before operating is one designed by the government to protect investors’ interest. When a crypto company is licensed, then the company will be subject to observing all the regulatory laws and standards guiding the financial institutions within the country.
Here, all the licensed crypto companies will be bound by law to protect investors’ funds deposited with them and to repay investors should any damage arise in the future.
This means investors can now transact with greater confidence that their funds are protected by the laws while dealing with regulated crypto companies. New investors will also be attracted to join crypto trading as their funds will be more protected.