France’s financial markets regulator has signalled that it may block the use of “passporting” rights for crypto firms under the European Union’s new Markets in Crypto-Assets (MiCA) framework, raising questions about the future of a single harmonised market or digital assets in Europe.
Passporting, a core feature of MiCA, allows a crypto firm licensed in one EU country to operate across all 27 member states without needing new approvals. The French regulator, the Autorité des Marchés Financiers (AMF), is concerned that some companies could exploit this system by obtaining licenses in countries with lighter oversight, then freely accessing stricter markets such as France.
According to a report, France is not acting alone. Austria and Italy have also voiced support for stronger supervision. Together, they are calling for greater involvement of the European Securities and Markets Authority (ESMA) in monitoring large players in the crypto sector. Their proposals include tougher rules on custody, cybersecurity, and cross-border activities to ensure that risks are consistently managed.
MiCA came into effect for service providers in December 2024, marking the EU’s first comprehensive attempt to regulate digital assets. It was celebrated as a landmark policy aimed at creating legal certainty and attracting investment. But France’s stance highlights a growing tension: balancing the benefits of a single EU market with the need to prevent regulatory arbitrage.
If Paris follows through, crypto firms that expect frictionless access to all EU markets may face additional hurdles. That could fragment operations, increase compliance costs, and delay expansion plans. For investors and firms watching Europe’s regulatory landscape, the French warning is a reminder that even landmark legislation like MiCA will continue to face political and practical tests as it rolls out.
