As the European Union’s comprehensive cryptocurrency regulations continue to unfold, France finds itself at the center of a pivotal debate. With the implementation of the Markets in Crypto-Assets (MiCA) regulation, France has raised the stakes by considering a move that could block the ‘passporting’ of crypto firms across the EU. This potential decision has sparked discussions among legal experts and industry stakeholders about its feasibility and implications for the European crypto landscape.
France’s Bold Move
France’s contemplation of blocking passporting rights for crypto firms has sent ripples through the industry. Under the MiCA regulation, firms that secure a license in any EU member state can operate across the union without needing separate authorizations in each country. This ‘passporting’ mechanism is designed to streamline operations and encourage innovation within the EU’s single market. However, France’s potential block on this process could disrupt these plans.
French authorities argue that this move is necessary to prevent firms from exploiting licensing loopholes, ensuring that companies operating within their borders adhere to stringent standards. The French government’s stance is that a uniform regulatory framework should not come at the expense of national oversight and consumer protection. Yet, this position is not without controversy.
Legal Feasibility vs. Strategic Warning
Legal experts are divided on whether France’s threat is legally viable. Some believe that, under EU law, member states have certain levers to pull if they believe that the common framework is being undermined. In this view, France could argue that additional national measures are warranted to protect its citizens and financial system.
Others see France’s posturing as more of a strategic warning to crypto firms eyeing regulatory loopholes. Critics of the proposed block suggest that it might be intended to deter companies from pursuing the path of least resistance in obtaining operating licenses. By signaling a tough stance, France may be seeking to elevate the standards of compliance and transparency across the entire EU.
Industry Reactions
The reaction from the crypto industry has been mixed. Some firms express concern that France’s actions could create bureaucratic hurdles, stifling innovation and limiting market access. Startups, in particular, fear that additional layers of regulation could hamper their ability to scale efficiently within the EU.
Conversely, other industry players welcome France’s hardline approach, seeing it as a necessary step to ensure that only legitimate and well-regulated entities flourish. They argue that a robust regulatory environment could enhance consumer trust, which is crucial for the sector’s long-term growth.
A Balancing Act
The crux of the debate lies in balancing national interests with the broader goals of the EU. Proponents of MiCA emphasize the importance of a unified regulatory framework that simplifies operations for businesses while safeguarding consumers. They contend that national deviations could lead to a fragmented market, undermining the very essence of the EU’s single market.
On the other hand, France and like-minded nations argue for the importance of retaining some degree of national oversight. They highlight the diverse financial landscapes and consumer protection needs across the EU, advocating for flexibility within the overarching framework.
Looking Ahead
As the EU continues to navigate the complex waters of cryptocurrency regulation, the outcome of France’s deliberations will be closely watched. If France proceeds with its plan, it could set a precedent for other countries to follow suit, potentially reshaping the regulatory landscape.
For now, the industry remains in a state of uncertainty, with firms weighing their options and considering the potential impacts on their operations. The coming months will likely see further discussions between EU regulators, national governments, and industry stakeholders as they seek to chart a path forward that balances innovation with oversight.
In the end, the resolution of this issue will play a critical role in shaping the future of the crypto industry in Europe. Whether France’s stance represents a new chapter in regulatory enforcement or merely a cautionary tale will depend on the ongoing dialogue and decisions made by policymakers and industry leaders alike.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
