Risk Mitigation: Circle Applies for Regulation in France

As the US stumbles in crafting bespoke regulation for digital assets, Circle, the issuer of dollar-based stablecoin USDC, has applied to be regulated in France.

France crafted digital asset regulation some years ago in an attempt to provide clarity for firms looking to offer crypto. While the rules have been lightly utilized, the forthcoming vote on EU-wide crypto regulation or MiCA [Markets in Crypto Assets Directive], may provide fertile ground for digital asset innovation. The decision by Circle to establish a foothold in Europe should help mitigate some of the jurisdictional risk growing in the US.

1/ Today we announced that we have formally registered to be regulated in France as the headquarters for our European expansion, under French digital assets and e-money laws, with plans for EU-wide operations under MiCA. https://t.co/OG4xVRVPLX

— Jeremy Allaire – jda.eth / jdallaire.sol (@jerallaire) March 21, 2023

In a blog post, Circle said they were “doubling down” on European expansion. Circle has periodically lamented the lack of regulatory clarity in the US. Dante Disparte, Circle’s Chief Strategy Officer and Head of Global Policy, said they are committed to expanding their presence and engagement with European and French regulators.

Circle has applied to be licensed as an Electronic Money Institution (e-Money)  and a registered Digital Asset Service Provider (DASP). If approved, Circle will be regulated by both the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and Autorité des Marchés Financiers (AMF).

Circle said its intent to pursue full approval from the AMF may make it the first company to receive full authorization under the DASP regulatory regime.

Circle added that authorization in France will help it with its relatively new Euro stablecoin – EUORC.

MiCA is more comprehensive legislation that is working its way through the EU process. A vote on MiCA is expected to take place in the coming weeks.

Jean-Noël Barrot, the French Minister Delegate to the Ministry of Economy, Finance and Industrial, and Digital Sovereignty, in charge of Digital Transition and Telecommunications, issued a statement on Circle’s announcement:

“We are delighted and honored that Circle chose France as the base for the development of its activities in Europe. This decision fully validates France’s ambitions to become a hub for Web3 technologies, pursued with strong leadership by President Macron and Minister Bruno Le Maire since 2017. The deeply rooted expertise and experience of the French authorities on the crypto-asset sector will allow Circle to benefit from a harmonized and robust approach, supported by the MiCA regulation, all along its licensing process and beyond. Circle’s choice is one more important proof that the French government’s policy measures aimed at fostering the growth of an innovative crypto-asset sector, designed to be robust and secure, is fully paying off. We are more convinced than ever that France has all the assets to become a global reference for blockchain-based innovation and digital economy.”