France MiCA: Why Paris Pushes Back on Minimum-Standard Passporting
Informational content only. Not legal or tax advice.
MiCA Passporting in Plain English
MiCA gives crypto-asset service providers (CASPs) a clear path: get authorized in one EU country and then offer services across the Union via passporting. The idea is one rulebook instead of 27 different regimes.
In practice, a second dynamic appears: some firms aim to license in jurisdictions where the process is faster or lighter, then enter the whole EU market. That’s what people call regulatory arbitrage.
Why France Is Against Passporting by the Minimum Standard
France’s core concern is that single rules will not be applied with the same strictness everywhere.
In 2025, this became a public dispute among regulators: Reuters described tensions around the fact that some jurisdictions were issuing MiCA approvals faster than others, and France—through its regulator—did not rule out challenging licenses granted by other EU countries.
Paris’ main argument is straightforward: if a major player gets an easy license and serves French customers, then consumer-protection, reputational, and banking-compliance risks land in France—while France has limited leverage over how the home supervisor enforces day-to-day oversight.
What’s Being Debated at EU Level: Stronger ESMA Oversight and More Centralization
Against this backdrop, the European Commission has floated options under which ESMA could gain more direct supervisory powers over the largest crypto firms, aiming to reduce gaps in national approaches.
That idea meets resistance: for example, Malta has publicly pushed back on centralization at this stage, warning about extra bureaucracy and a potential hit to EU competitiveness.
The real 2026 question is: keep MiCA passporting largely as-is (with a focus on supervisory convergence)—or add a tougher second layer of oversight for the biggest players via ESMA.
What This Changes for Exchanges and Crypto Service Providers
If France’s line gains momentum—through supervisory practice or reforms—several outcomes become more likely:
1) Getting licensed becomes harder
Expect higher expectations for internal controls, risk management, conflicts of interest, and operational transparency—especially for large platforms. The logic: if you serve the entire EU, you should meet the highest standard, not the minimum.
2) More scrutiny of real substance
Supervisors will look beyond a legal address: where the team sits, how compliance is staffed, how key functions are run, custody arrangements, and how AML controls work in practice.
3) More friction in passporting
More information requests, tighter product/channel approvals, and more cautious marketing or listings for sensitive assets.
What It Means for Users: KYC/AML and On-/Off-Ramps
For most users, the biggest impact shows up through banks and fiat rails:
- KYC/AML becomes more bank-like: more focus on Source of Funds/Wealth (SoF/SoW), transaction purpose, wallet/address linkages, and transaction frequency/patterns.
- On-/off-ramps become more selective: in some places, stability improves (fewer sudden freezes), while “grey” routes fade faster—especially in countries with strict banking compliance.
- More standardized statements and reporting: often a net positive, because it reduces chaos in documentation and disputes.
2026 Investor Checklist
- Choose platforms that clearly disclose jurisdiction, MiCA authorization status, and country-by-country service terms.
- Keep your records clean: exports, TX hashes, deposit/withdraw histories, and proof of funds—useful for banks and tax reporting alike.
- Don’t rely on a single fiat channel: SEPA, cards, and alternative providers aren’t just convenience—they’re resilience.
The winners tend to be services that build serious processes from day one: compliance, clear rules, and careful bank relationships. Choose wisely.