French financial authorities are strengthening the country’s cryptocurrency regulations in a move to prevent illicit activities like money laundering and terrorism financing.
On Dec. 9, several ministries in France jointly introduced an order aiming to prevent anonymous digital asset transactions by banning anonymous crypto accounts.
The new regulatory effort is backed by French finance minister Bruno Le Maire, overseas minister Sébastien Lecornu, and junior economy minister Olivier Dussopt. The order is pursuant to Article 203 of France’s PACTE law, which stands for the Action Plan for Business Growth and Transformation.
In the document, the ministries have admitted that digital assets or cryptocurrencies provide “significant opportunities for the economy,” noting that the French government is fully aware of its importance.
Despite promising opportunities, crypto also comes with significant risks related to illicit financial activity, the authorities noted.
The ministers specifically referred to September 2020 arrests involving a terrorist financing network using digital assets to cover their tracks. Major global authorities and organizations like the Financial Action Task Force, the G7 and the G20 have called for measures to prevent illicit activity using crypto, the ministers said, noting:
“The government wishes to promote the development of crypto assets under the best conditions of security and attractiveness.”
As such, the French government is preparing to introduce new regulatory provisions in order to apply new digital identification tools for crypto transactions and virtual asset service providers, or VASPs.
“This request, which emanates from actors in the ecosystem, will make it possible to fight against anonymous transactions in digital assets while facilitating user identification,” the document reads.
French authorities have been vocally concerned over the financing of illicit activities with cryptocurrency. In October 2020, French finance minister Le Maire criticized crypto for providing additional tools for illicit activities like purchasing drugs and weapons, as well as money laundering.