As 2023 nears its end, France is opening its doors wider to international crypto firms, with Coinbase and Circle achieving significant regulatory milestones in the country on Dec. 21.
Coinbase, a major crypto exchange, has been granted the status of a Virtual Assets Service Provider (VASP) by the Autorité des Marchés Financiers, France’s financial regulatory body. This registration aligns the company with the European Union’s and international compliance standards for digital assets.
This VASP authorization allows Coinbase to provide a range of crypto services in France, including digital asset custody and facilitating crypto trading. Furthermore, the company recently expanded its services to institutional foreign investors through its international branch, offering trading in Bitcoin, Ether, and USD Coin.
On the other hand, Circle, known for issuing stablecoins, has been conditionally registered as a Digital Asset Service Provider in France. However, this registration comes with certain prerequisites. Circle needs to secure a Payment Services Provider approval, which hinges on obtaining an Electronic Money Institution license – a process currently underway, as detailed in a recent Circle blog post.
These developments in France contrast with the more challenging regulatory environment crypto firms face in the United States. Notably, the U.S. Securities and Exchange Commission (SEC) has been actively involved in legal actions against various crypto entities. For example, Coinbase faced a lawsuit in June from the SEC, which alleges that certain listed crypto tokens should be classified as securities. Coinbase has contested these claims, arguing for regulatory clarity and challenging the SEC’s stance on cryptocurrencies.
In response to these regulatory challenges, Coinbase has sought to engage with U.S. authorities for better rule-making regarding digital assets. After their initial request for new regulatory frameworks was declined, Coinbase appealed the SEC’s decision on Dec. 18, emphasizing the need for clearer guidelines for crypto businesses in the U.S.
This regulatory landscape highlights the diverse approaches towards cryptocurrency by different global authorities, with the European Union enforcing the Markets in Crypto-Assets Regulation (MiCA) since June, a comprehensive framework for digital assets not covered by traditional financial regulations.