Regulators question harmonized framework as national tensions rise
France’s financial regulator has signaled that it may attempt to block cryptocurrency firms from operating in the country under licenses granted in other European Union (EU) member states, raising questions about the strength of the bloc’s new Markets in Crypto-Assets Regulation (MiCA).
Passporting Under Pressure
The Autorité des Marchés Financiers (AMF) expressed concern that some crypto companies could exploit regulatory loopholes by seeking approval in countries with more lenient frameworks, then using passporting rights to operate across the EU. MiCA, which came into effect for crypto-asset service providers less than a year ago, was designed specifically to prevent this type of regulatory arbitrage.
Marina Markezic, executive director of the European Crypto Initiative, warned that “MiCA was designed to create one harmonised framework and give firms access to a single regulated market across the EU. That promise is now under pressure.” She added that while blocking passporting is “technically possible,” it would involve significant legal complexity.
Calls for ESMA Oversight
France joined Austria and Italy in calling for the European Securities and Markets Authority (ESMA) to oversee major crypto firms directly, rather than leaving supervision to national regulators. According to position papers, this approach could tighten oversight but might also require amendments to MiCA, potentially reopening political negotiations and creating fresh uncertainty for the industry.
Legal Debate Over Feasibility
Not all experts believe France has the authority to take such measures. Edwin Mata, lawyer and CEO of a tokenization platform, argued that “legally, the AMF cannot block a duly MiCA-licensed entity from operating in France.” He explained that as a regulation, MiCA applies directly and uniformly across all EU member states, limiting the scope for unilateral national restrictions.
Instead, Mata suggested the AMF’s warning is more symbolic, signaling that French authorities will scrutinize whether firms are misclassifying products under MiCA when they should fall under MiFID II, the EU’s broader securities framework.
The debate highlights the growing tension among EU regulators over how to enforce MiCA consistently. While France’s position reflects a push for stricter oversight, industry voices caution that undermining passporting could weaken MiCA’s goal of creating a truly single European market for digital assets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.