France’s Central Bank: Keep Financial Institutions Out of Crypto

France’s central bank wants to keep banks and other financial institutions out of the cryptocurrency business.

In a report published at the beginning of March, the Bank of France proposes to ban insurance companies, banks and trust companies from “taking part in deposits and loans in crypto-assets.” It also advocates prohibiting all marketing of “crypto-asset” savings products to the public, save for the “most informed investors.”

The report, which provides an overview of the technology and suggests strict regulatory provisions, claims that cryptocurrencies do not constitute money and emphasizes that they are not legal tender.

The document labels them instead as a medium of cyberattacks, money laundering and terrorism financing.

“Very little value is expressed in these crypto-assets,” the authors claim. They remark further:

“The anonymity that characterizes the means of production and transfer of the majority of crypto-assets favors above all a risk of them being used to criminal ends (sold on the internet for illicit services or goods) or used to the end of money laundering and the financing of terrorism.”

Echoing other critics, the report also dismisses the recent run up in “the price of crypto-assets” as a “speculative bubble” akin to the “tulip mania” period in the Netherlands from 1634 to 1637.

As for the central bank’s suggested regulatory framework, it writes that its priority is to institute anti-money-laundering (AML) and combating the financing of terrorism (CFT) measures, which would be achieved by expanding the European Union’s Fourth Anti-Money Laundering Directive

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