France's Financial Markets Authority and other French authorities have outlined proposals to clarify European Union crypto regulation, strengthen supervision and support euro stablecoins and tokenized bank deposits. Crypto and traditional finance should retain distinct legal regimes, but with better coordination and greater convergence over time. The proposals call for streamlining the Markets in Crypto-Assets Regulation (MiCA) and clarifying its boundaries with financial instruments and payment services legislation, particularly where an activity requires multiple authorizations. Financial and payment instruments should remain fully subject to their respective legal frameworks, regardless of the technology used. The authorities support accelerating the use of euro stablecoins and tokenized bank deposits, particularly for payments involving countries outside the EU and for tokenized finance. They also propose explicitly prohibiting EU-authorized providers from offering services involving stablecoins that do not meet MiCA requirements. Wholesale central bank money, including in digital form, should retain its privileged role in settling financial asset transactions. Access to global crypto liquidity through regulated providers should remain available, subject to equivalent protection and reciprocity. For stablecoins issued as fungible tokens both within and outside the EU, the proposed framework would require equivalence assessments, supervisory cooperation and additional safeguards covering reserves and redemption rights. On supervision, the proposals would strengthen the European Securities and Markets Authority's (ESMA) role in overseeing significant crypto-asset service providers and crypto conglomerates' crypto activities. Prudential requirements should reflect actual risks, alongside coordinated action against unauthorized providers. A proportionate framework for decentralized finance should establish clear intermediary responsibilities, appropriate due diligence obligations and protocol certification. The authorities also seek clearer rules for staking, which involves locking up crypto-assets in exchange for remuneration, and for crypto lending and borrowing.
France's Financial Markets Authority and other French authorities propose clearer EU crypto rules and stronger European supervision
France's Financial Markets Authority and other French authorities propose clearer boundaries between EU crypto, financial instruments and payment rules, while retaining distinct legal regimes. Their proposals support euro stablecoins and tokenized deposits, prohibit authorized providers from servicing stablecoins that breach MiCA requirements, and establish safeguards for stablecoins issued both within and outside the EU. They also seek stronger ESMA supervision, prudential requirements aligned with actual risks, and clearer protections and responsibilities in decentralized finance, staking and crypto lending.