France Threatens Block on Crypto ‘Passporting’ in EU, Fearing Regulatory Arbitrage Linked to MiCA Interpretation Variations
Paris Ramps Up Tone Against Deemed Lax Licenses
In an interview with Reuters, the president of the Financial Markets Authority (AMF), Marie-Anne Barbat-Layani, warns: France could oppose the use of the ‘European passport’ by some crypto entities already licensed elsewhere in the Union. An option described as ‘nuclear’, as it challenges a cornerstone of the single market. AMF fears a ‘regulatory shopping’ phenomenon, where platforms choose the most lenient regulator to obtain their MiCA license.
MiCA, a Divisive Advance
Implemented this year, the MiCA regulation provides crypto companies with a unique framework: once approved in one Member State, they can operate in all 27 EU countries. But the promise of harmony is wavering. The initial months of application reveal major discrepancies in rule interpretation. Result: players like Coinbase, authorized in Luxembourg, or Gemini, licensed in Malta, can already move freely, much to the dismay of stricter regulators, including our gentle France.
Rome, Vienna, and Paris United
France is not alone. Italy and Austria join this call to shift the supervision of major platforms to the European Securities and Markets Authority (ESMA), based in Paris. Their argument is clear: only centralized oversight can ensure consistent investor protection and prevent local loopholes from undermining the entire European market.
The Specter of a Fragmented Market
AMF insists: blocking a passport would not send ‘a good signal for the single market’, but the threat remains on the table. The stakes transcend mere bureaucracy. The crypto sector, worth trillions of dollars, is closely monitored by global regulators who fear systemic risk in the event of a misstep. However, AMF asserts that if each country applies MiCA differently, investors’ confidence could falter and the EU could lose the credibility it seeks to build.
Cracks Already Visible
The Maltese example illustrates these tensions well. Earlier this year, a ESMA report criticized the licensing process on the island as inadequate in risk assessment. This further supports Paris and its allies in demanding Union-wide supervision.
Towards a MiCA Revision?
Beyond power transfer, the three regulators demand text adjustments: stricter rules for activities outside the EU, increased cybersecurity oversight, and better management of new token issuances. These signals indicate that MiCA, far from static, could evolve rapidly under pressure from major European capitals.
A Political Standoff Brewing
The question remains whether all Member States will agree to cede some of their sovereignty to ESMA. Certain jurisdictions, proud of attracting crypto giants as ‘early adopter’ hubs, may resist change. But France has warned: it is prepared to do whatever it takes to prevent Europe from becoming a regulatory gray zone.
