The French Financial Markets Authority (AMF) has provided its position on crypto-assets and regulation in a response to the European Commission’s consultation. While the country supports an “ambitious approach” to foster innovation, authorities remain concerned about the threat of global stablecoins.
AMF Responds to EU Proposal on Crypto Assets
The EU has been working on a strategy that promotes digital finance within the bloc but also addresses the new risks it causes. The Commission launched a public consultation between Dec 19, 2019, and March 19, 2020, on how to develop a sustainable legal framework for the crypto asset markets.
The AMF response largely agrees with the overall approach and wishes to see a favorable environment for blockchain projects to thrive in the EU. But, it remains more than quietly cautious about stablecoins.
On the question of how to define and classify crypto-assets, the AMF believes that this should be based on existing categories and:
in particular, to distinguish between crypto-assets that qualify as financial instruments and those that do not
For those cryptos that do not fall into the financial instruments category, the AMF is supportive of a new legal framework for monitoring them which includes “mandatory elements” such as AML-CFT.
The French would also like to see the creation of a type of legal sandbox in the shape of a “Digital Lab” at the European level that allows projects straddling the security token category to develop without too much legal restraint. The AMF also supports:
The creation of an interbank settlement asset in central bank money to facilitate Delivery vs Payments process on chain.
EU Must Adopt ‘Specific Provisions’ for Global Stablecoins
In the AMF’s response, French authorities have recommended that the EU adopt specific provisions when it comes to global stablecoins. These, they maintain, “could pose systemic risks for the European Union.”
Given the French reaction to Libra, it’s unsurprising that they remain cautious over global stablecoins. In fact, while other countries such as Switzerland and the UK were in favor of studying a regulatory framework for it, France unequivocally stated that it would block Facebook’s cryptocurrency completely.
France’s Finance Minister Bruno Le Maire, in particular, felt that it would adversely affect the economic sovereignty of countries in the European Union (EU).
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