France’s securities regulator, the AMF, is considering refusing MiCA passporting for crypto firms authorized in other EU states to prevent regulatory arbitrage and enforcement gaps under MiCA. This could restrict firms licensed elsewhere from operating in France without local authorization.
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Key point 1 — France may refuse EU passporting under MiCA to prevent enforcement gaps.
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Key point 2 — France, Austria and Italy back ESMA supervision and MiCA revisions for stronger oversight.
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Key point 3 — ESMA peer review flagged weaknesses in Malta’s MFSA authorisations, prompting calls for coordination.
MiCA passport ban: France warns it may refuse EU passporting to stop regulatory arbitrage — read the latest regulatory steps and implications for crypto firms.
France’s securities regulator, the Autorité des Marchés Financiers (AMF), has warned it may refuse EU passporting under MiCA to avoid enforcement gaps caused by divergent national licensing standards.
What is France proposing about the MiCA passport?
MiCA passport refusal refers to the AMF’s warning that France could block firms operating locally under MiCA licences issued by other EU member states. The proposal aims to stop regulatory arbitrage where firms choose the most permissive regulator and operate across the 27‑nation bloc with a single passport.
How could France block EU passporting under MiCA?
France’s AMF told Reuters it is studying legal and regulatory options, including national measures that would limit or refuse the use of an EU passport for crypto‑asset service providers in France. The move would rely on interpreting MiCA’s provisions and EU law to protect market integrity while coordination with ESMA would be critical.
The AMF emphasised concerns that some crypto firms are seeking authorisations in jurisdictions with lower thresholds or less robust supervision. Marie‑Anne Barbat‑Layani, chair of the AMF, described such a refusal as “very complex,” likening it to an “atomic weapon” for the market, underlining the severity and potential market impact.
Why are France, Austria and Italy calling for ESMA supervision?
These countries argue that ESMA centralised supervision would deliver consistent enforcement across the EU and reduce the risk of regulatory arbitrage. The position paper cited by Reuters recommends ESMA oversee major crypto firms and support revisions to MiCA to enhance cross‑border supervision, cybersecurity oversight and rules on new token offerings.
What did ESMA’s peer review of Malta’s MFSA find?
ESMA’s ad hoc Peer Review Committee (PRC) concluded that the Malta Financial Services Authority only partially met expectations in authorising a crypto service provider. The PRC recommended stronger monitoring of authorisation growth and adjustments to supervisory practices when needed.
A visual summary of the PRC’s assessment of the MFSA by assessment area. Source: ESMA
Regulators cite the PRC findings as evidence that uneven national implementation could weaken MiCA’s intent to create a uniform rulebook across the bloc. France’s stance highlights a push for higher supervisory convergence or a transfer of powers to ESMA for cross‑border consistency.
Frequently Asked Questions
Can France legally refuse a MiCA passport?
France may seek legal pathways to limit passporting, but doing so would involve complex interpretation of MiCA and EU law, likely requiring coordination with ESMA and potentially legal review at the EU level.
What would a passport refusal mean for crypto firms?
A refusal could force firms licensed in lenient jurisdictions to obtain French authorisation or cease operations in France, increasing compliance costs and prompting re‑assessments of market entry strategies.
Key Takeaways
- Regulatory friction: France fears enforcement gaps under MiCA and may block passported firms.
- Call for central supervision: France, Austria and Italy back ESMA oversight to harmonise enforcement.
- Operational impact: Firms could face new national authorisation requirements and higher compliance scrutiny.
Conclusion
The AMF’s warning over MiCA passport use signals growing concern about uneven enforcement across the EU and strengthens calls for ESMA supervision and targeted MiCA revisions. Market participants should monitor regulatory developments and prepare for tighter cross‑border supervision and potential national authorisation requirements.
