French authorities suggest changes to crypto regulation

French government agencies have proposed changes to the European MiCA regulation, which aims to govern the crypto-asset market. The proposals include removing certain categories of crypto-assets and adjusting how investor protections are managed.

Proposed removal of asset-referenced tokens

One of the key suggestions involves the removal of a category called asset-referenced tokens (ART), which are tokens whose value is tied to multiple assets or reference values. These differ from stablecoins, which are typically backed by a single currency like the US dollar. The French authorities believe that the lack of ARTs in the EU may be due to legal uncertainties and regulatory challenges.

Integration of multi-currency stablecoins

To ensure that no products fall outside the regulatory framework, the French authorities propose integrating stablecoins backed by multiple currencies into the category of electronic money tokens (EMT). This would help maintain regulatory oversight while allowing for more diverse stablecoin offerings.

Strengthening investor protections

The French authorities also want to improve investor protection by enhancing the role of the European Securities and Markets Authority (ESMA). They propose creating a single European counter for crypto-asset offers, directly supervised by ESMA, to increase oversight and efficiency in the regulatory process.

Encouraging euro-based stablecoins

France supports the development of stablecoins denominated in euros, aiming to reduce the dominance of dollar-backed stablecoins. However, the authorities caution that these digital assets should not become a common means of payment in the EU, as existing banking systems already meet most payment needs.

Proposals remain under discussion

These proposals are part of an ongoing revision of the MiCA regulation. Any changes would need to be debated and agreed upon at the European level, and no final decisions have been made yet.