France indicated that it could challenge the right of some crypto companies that in other countries in the European Union are permit to work in their own country, escalating pressure for centralized supervision of the digital assets industry of the block, Reuters reported on 15 September.
Marie-Anne Barbat-Layani, president of the financial regulator of France, said that the agency is increasingly concerned that among the new markets of the EU in Crypto-assets (MICA) framework, companies are looking for jurisdictions with separate standards to gain quick access to the 27-Nation market.
Mica, who is in force this year, enables companies to secure and use a license in one EU state as a “passport” to operate in the block. Although designed to harmonize supervision, the regime has already uncovered major differences in how national watch dogs interpret the rules.
Push to EU level supervision
According to a position paper seen by Reuters, France joined Italy and Austria to call up the European Securities and Markets Authority (ESMA) to supervise large crypto companies.
The supervisors warned that inconsistent national practices can undermine the protection of investors and market stability. Barbat-Layani said that France is willing to use a ‘atomic weapon’ by refusing to recognize licenses that have been granted elsewhere in the EU.
She said:
“It is very complex and not a very good signal for the internal market … but it is still a possibility that we have in reserve.”
The AMF did not mention specific companies, although Coinbase received a MICA license in Luxembourg and Gemini has obtained a Malta during the transition period.
National differences under control
ESMA, which previously encouraged legislators to consider Pan-EU Supervision, said it will continue to work to guarantee consistent authorizations in the Member States.
Malta, one of the first countries to embrace the rules for digital assets, was criticized earlier this year by ESMA for shortcomings in its license process.
France, Italy and Austria also urged legislators to tighten the MICA rules, including stronger supervision of companies outside the block, improved cyber security standards and clearer rules for new token offering.
The Push is confronted with resistance from some EU members who prefer to retain national control, but ESMA chairman Verena Ross said that she would welcome a broader authority.
At stake is supervision of a fast -growing industry of several dollars, whereby supervisors fear that the financial markets can destabilize if they are unevenly under supervision.