Blockchain Takes on Europe: Binance bounces back in France

May 27, 2022

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3 min read

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What's going on here?

France becomes the first country in Europe to grant the crypto giant Binance regulatory approval to provide digital asset services.

What does this mean?

Binance is now listed as a registered digital asset service provider (DASP) by French stock market watchdog Autorité des Marchés Financiers (AMF), the French equivalent of the UK’s Financial Conduct Authority, which regulates the market and “ensure financial literacy among investors”. The crypto giant needs regulation to mitigate the risk of fraud and increase their consumer protection which currently factors into why they are not allowed to carry out regulated activity in certain areas. The founder of Binance and current CEO, Chanpeng Zhao, congratulated France on being “very progressive” in embracing crypto and also commended its “advanced” understanding. The green light was granted after months of consistent regulatory setbacks whilst Binance was trying to prove to the French Government that it was focusing on anti-money laundering compliance.

Increased regulation will provide protection for the crypto community and allow for considerable growth of crypto in France. Binance is the world’s largest crypto exchange by volume and was originally founded in China. According to the statistics published by CoinGecko, Binance’s trading volume exceeds $14 million. Since Beijing’s crypto ban, the crypto firm moved to operate mainly in Singapore which is quickly becoming a “regional hub for blockchain start-ups” but decided last year to withdraw their licence application (potentially due to Singapore introducing stricter licensing regulations there) and move further afield globally. They have also recently gained approvals across the Middle East within the UAE and Bahrain.

What's the big picture effect?

To put it simply, by France being the first European country to grant the greenlight for Biance to provide digital asset services in France, they are paving the way for “the mainstream adoption of cryptocurrency” on a much greater scale. Meeting the strict French compliance requirements to successfully obtain DASP registration will also encourage other European countries to follow suit, with David Princay, CEO of Binance France, noting how this is a “key milestone for crypto in Europe”.

Zhao notes that “effective regulation is essential” to allow other countries to be comfortable in making this transition. It’s also interesting that Binance, after taking pride in having no official headquarters, are choosing to establish their base in Paris. This could be in response to backlash from authorities regarding not having a base. However, it is arguable that as an alternative to conventional financial trading and as a progressive, tech-focused industry, Binance should be released from conventional practices such as having a headquarters. However, it seems that making these somewhat traditional moves may alleviate any residual apprehension of governments and could accelerate the decision-making process for other European countries to make the same move.

Binance has also committed to investing €100m to “support the development of the French and European blockchain and cryptocurrency ecosystem” as another hefty move towards wanting to prove itself as a company that aligns with practice compliance.

Undeniably, France and Binance are pioneering changing negative perceptions around crypto and educating the public on the benefits of blockchain technology. We are truly in exciting times as the possibility for an aggressive global transition towards non-traditional financial practices emerges that would have been unheard of not so long ago. Curiosity is sure to spike when assessing which country will be next in accelerating their decision to accept crypto into regular financial discourse and which ones will choose to remain apprehensive and risk being left behind.

Report written by Rida Ahmed

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