French Financial Regulator Floats Plans for Voluntary Regulation of Crypto Companies

Financial Markets Authority French Regulator cryptocurrency Bruno Le Maire

Financial regulators worldwide are continuing to shape their policy approach to cryptocurrency. Now, regulators in France have proposed a novel alternative, which could see crypto companies subject to a voluntary system of regulation.

The Financial Markets Authority, France’s chief securities regulator, announced plans to release its “experimental” crypto regulatory framework later this month, which will include regulations on tax, consumer protections and capital requirements, among other things.

However, unlike the position in other jurisdictions where crypto regulation is mandated by law, the system in France is set to be voluntary, with crypto firms asked to adhere to the regulations in order to win the approval of the regulator.

Anne Marechal, executive director of legal affairs at the Financial Markets Authority, described the measures as a “precursor” to what she saw as the inevitability of international regulation for cryptocurrencies.

The proposals are in keeping with previous moves from the regulator. Back in April, the regulator created a new obligation for banks to open accounts for crypto businesses who had opted in to being regulated by the watchdog, with similar schemes in place for those looking to obtain an operating visa within the cryptocurrency sectors.

At the time these measures were introduced, French Finance Minister Bruno Le Maire said the European Union should adopt the French model in a bid to create a “single regulatory framework” across the bloc for cryptocurrency businesses.

The proposals have drawn support from the cryptocurrency sector, with a growing number of crypto operators calling for legal clarification in order to stimulate growth in their businesses and markets.

Frederic Montagnon, the co-founder of crypto exchange LGO, said even voluntary regulation would be welcomed by business.

“When you are an entrepreneur, the worst that can happen to you is to set up your business where there is no regulation, to see an adverse regulatory framework later imposed that jeopardizes your whole business.”

The measures will be closely watched across the EU and elsewhere, with jurisdictions worldwide continuing to weigh the optimal format for regulating the cryptocurrency sectors.