France has warned it could block cryptocurrency companies licensed in other EU member states from continuing operations in France if regulatory standards under the EU’s new MiCA framework are not uniformly enforced. Reuters reports that the French financial markets regulator (AMF) is especially concerned about “passporting”, where a license in one EU country allows operations across all member states.
The legislation has revealed inconsistencies in the enforcement of rules by national regulators, prompting concerns about the speed at which certain licenses are being issued and whether cross-border firms are being properly monitored.
Marie-Anne Barbat-Layani, president of France’s AMF, urged stricter oversight, saying firms are doing “regulatory shopping,” obtaining licenses in countries with lighter enforcement, Malta often cited among them. In July, ESMA’s peer review of Malta’s financial regulator found it only “partially met expectations” when authorizing a crypto provider, underscoring France’s concern that uneven supervision could weaken the entire framework.
She emphasized that the country would not exclude the possibility of refusing such EU passports if oversight remains weak. She described this measure as an “atomic weapon,” signaling how serious France is about pushing for higher standards.
Italy’s Consob and Austria’s FMA have aligned with the country in calling for oversight of large crypto firms to be moved to the European Securities and Markets Authority (ESMA), the EU’s central financial regulator.
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Under MiCA (Markets in Crypto-Assets), which came into force this year, crypto-asset firms can get licensed under one EU member state and then use that authorization (“passport”) to operate throughout the EU. However, regulators argue that this system is revealing inconsistent interpretations of MiCA rules, especially in areas like cybersecurity, governance, token issuance, and how non-EU operations are managed.
France, Italy, and Austria all raise concerns that some member states are more lenient in granting licenses, possibly undermining protections for investors and the stability of financial systems if firms licensed in “lighter touch” jurisdictions exploit loopholes.
If the country does move forward with blocking passported licenses, this could force some exchanges or service providers to apply for French licenses directly, rather than relying on a license from another EU country. Increase scrutiny on regulators that currently issue licenses widely seen as more permissive. And spur legal challenges or disputes over what constitutes acceptable compliance under MiCA.
Regulators are also pushing for revisions to MiCA, including stricter rules for how crypto companies handle business outside of the EU, better cybersecurity standards, and more oversight of token offerings
While France’s position reflects broader anxiety among several member states, others warn that disrupting passporting could hamper market integration in the EU, potentially increasing compliance costs and fragmentation. France’s AMF recognizes that refusing passports is legally complex and could send a negative signal for the EU single market.
Still, the push toward granting ESMA greater supervisory powers has allies. AMF, Consob (Italy), and FMA (Austria) argue that centralized supervision could ensure more consistency, reduce risk of regulatory arbitrage, and bolster protections for Europeans using or investing through crypto platforms.
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