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“License registration obligatory”
François Villeroy de Galhau, Governor of the Bank of France, gave his New Year’s speech on the 5th. In it, he also mentions the regulation of crypto assets (virtual currency).
In 2022, turmoil in the cryptocurrency market was one of the factors, and the magnitude of volatility (price fluctuations) in the financial markets increased, according to Gallow.
France needs to switch as soon as possible to make licenses mandatory rather than simply requiring digital asset service providers (DASPs) to register their licenses.
This must be done and a framework of trust established well before the MiCA comes into force.
A series of events, from the collapse of the old Terra ecosystem in 2022 to the collapse of FTX, have supported this idea.
association: Severe shock in the virtual currency market, summary of Alameda shock and FTX turmoil
What is FTX
A cryptocurrency exchange led by Bankman-Fried. Since its establishment in 2019, it has rapidly made a name for itself and has grown into a major exchange after Binance, the largest exchange in the industry. After that, it went bankrupt and filed for bankruptcy in November last year.
Cryptocurrency Glossary
In France, the financial regulator AMF is responsible for registering and licensing cryptocurrency companies. Major cryptocurrency exchange Binance was also recently approved for business registration in December.
association: Cryptocurrency exchange Binance completes registration in France
Policy to aim before MiCA enforcement
The MiCA referred to by Governor Gallo stands for “Market in Crypto Assets” and is the comprehensive cryptocurrency regulation proposal announced by the EU in September 2020. It focuses on regulating stablecoins and other cryptocurrency transactions, including licensing and consumer protection requirements.
Final MiCA adoption is now expected in February 2023. After formal adoption, European regulators, including France, are expected to spend 12 to 18 months drafting and enforcing new rules based on the law.
Therefore, it is expected that the new MiCA regulations will not actually come into force until 2024. Garraud appears to want to make the licensing system compulsory in France sooner rather than later.
association: Europe’s large virtual currency bill MiCA, final vote in 2023 = report
Besides cryptocurrencies, Gallow also talked about inflation. Inflation “was down to 6.7% in December, but it’s still not good enough,” he said.
The Banque de France expects inflation to ease back towards 4% by the end of the year, but the policy is aimed at “reducing inflation to 2% between the end of 2024 and the end of 2025”. He explained that the policy is to carry out The US Fed is also tightening monetary policy with an inflation target rate of 2%.
association: Financial market tankan on the morning of the 7th | NY Dow rebounds sharply, US 10-year bond yield drops sharply
Cryptocurrency situation in France
According to the survey results released by TripleA in July 2022, it is estimated that 3.4 million people, or about 5% of the total population, own cryptocurrencies in France. This is an increase of 1.7% in one year from 3.3% in 2021.
50% of cryptocurrency holders were young people aged 18-34. In addition, more than 45% of cryptocurrency holders used cryptocurrencies to pay for goods and services.
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