In a major development for the cryptocurrency industry, Coinbase has secured registration with the French markets regulator, granting them approval to operate digital currency services in France. This move marks a significant step towards the expansion of Coinbase in the European market, enabling them to offer custody of digital assets, buying or selling digital assets in legal tender, trading of digital assets against other digital assets, and operating a digital asset trading platform. The approval comes at a crucial time for the exchange, as the regulatory environment in their home country, the United States, remains uncertain and unwelcoming towards crypto companies.
Coinbase’s registration with France’s AMF watchdog as a virtual asset service provider (VASP) reflects the ongoing efforts of European regulators to keep pace with the emergence of new technologies like cryptocurrencies and blockchain. They seek to strike a delicate balance between harnessing the potential of these technologies to improve payment systems and trading while ensuring consumer protection. To harmonize the operations of crypto companies across the European Union, the proposed Markets in Crypto Assets (MiCA) regulation is being introduced. This framework will allow crypto companies to utilize their VASP license in one EU country and “passport” into other countries to offer their services across the bloc.
Coinbase’s decision to expand in Europe through their registration in France comes at a time when US regulators have been cracking down on the cryptocurrency industry. The US Department of Justice settled with Binance, a leading crypto exchange, resulting in a payment of over $4 billion and the resignation of its CEO on charges of failing to prevent money laundering. The Securities and Exchange Commission (SEC) has also launched aggressive enforcement actions against the sector, including lawsuits against Coinbase and Binance, alleging their involvement in illegal securities transactions. The SEC’s classification of certain cryptocurrencies as securities would subject them to registration requirements, which Coinbase vehemently opposes. The exchange calls for new rules specifically tailored to the crypto industry to establish clear guidelines rather than relying on punitive enforcement.
France has been positioning itself as a leader in technology, with President Emmanuel Macron’s vision of transforming the country into a global tech hub. The government has committed substantial investments, including subsidies and state funding, over five years to achieve this goal as part of the “France 2030” plan. The country is home to major players in the crypto industry, such as Ledger, a leading provider of crypto custody services, and has attracted companies like Circle, Binance, and Crypto.com to establish their European bases in Paris. Circle recently obtained its own French VASP license from the AMF. France is witnessing increased adoption of cryptocurrencies, with 10% of French adults currently owning crypto assets and an additional 24% planning to enter the market within the next 12 months.
Coinbase’s successful registration with the French markets regulator represents a significant milestone in their expansion plans in Europe. Operating in one of the key European markets not only opens new avenues for Coinbase but also positions them strategically amidst regulatory uncertainty in their home country. The ongoing efforts by European regulators to introduce harmonized regulations for the crypto industry through the MiCA framework highlight their commitment to fostering innovation while prioritizing consumer protection. France’s emergence as a technological leader and its increasing crypto adoption further solidify its appeal as a favorable environment for crypto companies. As Coinbase continues to navigate the dynamic regulatory landscape, their expansion into France signals a promising future in the European market.