In a press release last week, Bruno Le Maire, the French Minister of Finance, commanded all digital currency providers to enforce strict Know Your Customer (KYC) and Anti-Money Laundering (AML) rules to combat terrorist financing.
As a part of this movement, the Ministry is urging providers to ban anonymous digital currency wallets while also making it compulsory for foreign firms looking to expand into France to register with regulators and for the first time to require digital asset to digital asset exchanges to be registered (previously only fiat currency to digital asset conversion was captured).
The Ministry’s eagerness to crackdown on digital asset exchanges was bolstered by its intention to fast-track enforcement through the introduction of new regulatory provisions.
The Ministry's press release (french language) reads:
This ordinance strengthens the fight against the anonymity of transactions in digital assets by including digital asset service providers (PSAN) among the entities having the ban on keeping anonymous accounts.
Adding:
New regulatory provisions will be presented to speed up the launch of the market for digital identity solutions for digital asset transactions. This request, which emanates from actors in the ecosystem, will make it possible to fight against anonymity transactions in digital assets while facilitating user identification.
Where does this response come from?
Although there are rules in place that presently require dFrench igital asset firms to enforce KYC and AML rules, digital assets in France are, for the most part, unregulated.
French authorities have been mindful of the volatility of digital assets and their unregulated nature for some time. This caution was evident in the 2017 joint statement by French Financial Market Authority and Prudential Supervisory Authority that warned citizens about the risks of digital assets.
Digital asset businesses have 6 months to comply with the changes now that they have been decreed by the French government, and any Australian digital currency businesses operating in France must comply by that time.