France considers blocking European crypto “passports”
The French Financial Markets Authority (AMF) is looking into the possibility of preventing cypto companies authorised in other EU Member States via the MiCA (Markets in Crypto-Assets) framework from operating freely in France. The regulator fears that licences issued in countries with more lenient rules could expose investors and the market to increased risks.
Marie-Anne Barbat-Layani, chair of the AMF, described this option as ‘compex‘, comparing its use to an ‘atomic weapon‘ if investor protection were compromised.
Consequences for DeFi startups and platforms
The MiCA European passport system was designed to simplify cross-border operations, allowing a single European licence to cover the entire bloc. France’s position could result in:
- Additional compliance hurdles: even companies with a MiCA licence may need to obtain specific authorisation to operate in France.
- Increased operational costs: DeFi startups and platforms may be forced to adapt their legal, technical and reporting systems to comply with French requirements.
- Strategic uncertainty: Expansion plans and partnerships across Europe may be delayed or reorganised.
Calls for enhanced supervision at European level
France is not alone in calling for strict enforcement. Austria and Italy have asked ESMA (European Securities and Markets Authority) to strengthen supervision, particularly in relation to:
- Cybersecurity
- Token issuance
- Operations based outside the EU
The aim is to ensure that the MiCA framework provides uniform investor protection in all member countries.
Impact on the Web3 ecosystem
For DeFi start-ups and teams, France’s position indicates that the MiCA passport is not guaranteed. Companies targeting European users will need to:
- Anticipate potential regulatory barriers in certain countries,
- Implement robust compliance and reporting systems,
- Stay informed about evolving national interpretations of MiCA.
While this may slow down some cross-border growth, projects that adopt quickly could gain a competitive advantage by establishing high standards of trust and transparency in the Web3 space.
