French Parliament Approves New Crypto Regulations Ahead of MiCA

France is ahead of the curve in terms of cryptocurrency regulation, as the country’s new cryptocurrency regulation was just approved by the Assemblée and Senate. The regulation, which is awaiting final approval from President Emmanuel Macron, would require French companies in the cryptocurrency sector to obtain an enhanced registration with the PSAN Approval. This regulation is stricter than the previous one, and would include rules for governance, segregation of funds, and guidelines for reports provided to regulators.

The new regulation, which is set to take effect in July 2023, will require companies to comply with the stricter regulations, but those that have already registered with the standard registration can continue to operate until MiCa, an EU-wide harmonized cryptocurrency regulation, comes into effect in 2026.

However, some experts are concerned that the regulation could discourage promising cryptocurrency startups from launching in France. According to Faustine Fleuret, the director of the ADAN, these startups may not be able to launch their businesses due to the stricter regulation, and France could miss out on innovation.

While France’s regulation is a good example for other countries to follow, it may not be the best approach if it drives innovation away. MiCa is already set to establish a calendar for the regulation of cryptocurrencies throughout Europe. As Anne-Sophie Cissey, the legal and compliance director at Flowdesk, said, “While this is a good first step, it’s not a giant leap, but a bridge that brings us closer to MiCA.”

The cryptocurrency market is rapidly evolving, and while regulation is necessary to protect investors and prevent fraud, excessive regulation could hinder innovation and drive companies to other countries with more favorable regulatory environments. France needs to find a balance between protecting investors and fostering innovation in the cryptocurrency sector.

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