France Pushes Back on EU Crypto Passporting: Uniformity vs Freedom

France Pushes Back on EU Crypto Passporting: Uniformity vs Freedom

France, backed by Italy and Austria, is threatening to block crypto firms from operating under EU “passporting” rules if they’re only licensed in other member states. That is, even if a company has a legitimate licence in, say, Malta, it might lose access to the French market under stricter oversight demands. 

These countries argue that the Markets in Crypto-Assets (MiCA) regulation, although intended to harmonize the framework across the EU, leaves too many gaps. Different national regulators are enforcing the rules differently — some faster, some more lenient — and firms are exploiting these differences by choosing jurisdictions with weaker enforcement. 

Under pressure, regulators in France want supervision of large crypto-firms to be moved to ESMA (the EU’s securities regulator) for better cross-border consistency. But this faces political resistance: some member states and industry stakeholders worry this could stifle innovation, centralize power too much and burden smaller firms. 

Why it matters:

• Could reshape where crypto companies choose to be based in Europe.

• Might limit some business models that depend on cross-EU licence portability.

• If France succeeds, this could set precedent for other countries to demand stricter local oversight.

• For users/investors, more consistent regulation could mean better consumer protection — but potentially higher costs and less flexibility.