Top French Regulator Wants ‘Limited’ Scope of EU on Crypto

The regulator thinks it's still early for accurately classifying digital assets.

The Autorité des Marchés Financiers (AMF) has clarified its position on crypto assets in its response to the European Commission’s consultation.

Though the French regulator defines any crypto asset as “a digital asset that may depend on cryptography and exists on a distributed ledger,” it still thinks it’s early for the precise classification of such assets.

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The regulator, however, clarified that proper distinction between crypto-assets that are qualified as financial instruments and that falls under electronic money should be made.

“We believe it is important to keep the electronic money regime, which is relevant and should not be undermined by a new regulation. However, it would be useful to work on the articulation between the different regimes,” the regulator stated.

Stablecoins are a threat to the monetary system

The French regulator is also concerned with the wide-spread use of stablecoins and pointed out that authorities could ban them if necessary.

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This echoes with the country’s stand against Facebook’s proposed digital currency Libra and its concerns for its impact on the economy.

“This proposal would allow a regulatory framework to apply to any stablecoin regardless of its size,” the response noted. “However, this requires the ability to draw a line between stablecoins which would be concerned by mandatory requirements and other payment tokens only partially covered by mandatory requirements.”

The French watchdog also thinks that the scope of the European Union should be limited to “crypto-assets” in order to allow a more “targeted effort.”

The response also pointed out the benefits of initial coin offerings (ICO) over the traditional initial public offerings (IPOs) but is concerned with the risks associated with such funding techniques.

Notably, the AMF last month approved registration of Coinhouse, a crypto trading company, paving its way for obtaining a banking license in the country. It was the first digital asset company obtaining such approval from the regulator.

The French push towards regulating the industry comes at a time when German regulators are steadily building laws for crypto assets.

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