Key Insights
- France’s DeFi regulation proposal targets crypto platforms that connect customers to decentralized protocols.
- French authorities proposed due diligence and certification safeguards for DeFi services.
- France also backed greater European oversight of major crypto firms and tighter stablecoin rules.
France proposed stricter DeFi regulation on Oct. 21, seeking clearer liability for regulated platforms connecting customers to decentralized protocols. The French Treasury, financial markets regulator, central bank, and prudential supervisor jointly published proposals for the European Union.
The proposals formed part of a review of the Markets in Crypto-Assets Regulation (MiCA). French authorities wanted intermediary responsibilities to reflect risks when platforms facilitate decentralized finance access.
DeFi Regulation Would Put More Responsibility on Platforms
France’s Financial Markets Authority and three other agencies said DeFi regulation should include certification and proportionate checks. Their joint statement argued that investor safeguards should extend to intermediaries connecting customers with decentralized protocols. The agencies aimed their duties at identifiable businesses, rather than every developer contributing code to a protocol.
Under that approach, firms facilitating protocol access could face responsibility for certain client incidents. The proposal did not establish an immediate liability rule or automatically make platforms responsible for every loss.
The proposed DeFi regulation framework called for due diligence before providers connect customers to decentralized services. Such assessments could examine protocol risks and help platforms decide which services to offer.
They also proposed a framework for protocol certification, adding another layer to DeFi security reviews. Such assessments could help identify vulnerabilities before customers interact with a service. Certification could not eliminate technical or financial risks.
The DeFi regulation proposal draws a distinction between decentralized software and intermediaries offering customers entry. That distinction could determine which businesses eventually face new legal duties under revised crypto regulations.
Why DeFi Regulation Remains Outside Much of MiCA
The existing MiCA regulation generally excludes crypto services delivered in a fully decentralized manner without intermediaries. The European Securities and Markets Authority has said regulators assess that exemption case by case.
Regulated businesses face a different position because MiCA already covers specified crypto services they provide. Revisions could therefore focus on their role in connecting users to protocols, rather than software alone.
The DeFi regulation debate followed a European Commission consultation launched on May 20, 2026. That process invited views on the framework, market developments, and possible additions to European Union rules.
The Commission closed its targeted consultation on Sept. 30, according to its official consultation page. Submissions will inform a review that could lead to legislative proposals, but no new requirements apply yet.
The DeFi regulation timeline matters for crypto platform liability because France’s position remains a policy recommendation. Lawmakers would still have to approve amendments before authorities could enforce additional obligations.
France Also Wants Broader European Crypto Supervision
French authorities backed transferring more supervision of major crypto-asset service providers to the European Securities and Markets Authority. Their proposal also covered crypto groups operating across businesses and national borders.
Current MiCA rules classify a provider as significant at 15 million average daily active European Union users annually. Article 85 requires firms reaching that threshold to notify their national supervisors. France’s DeFi regulation push therefore sits alongside an effort to reassess oversight of large platforms.
The government also urged stronger action against unlicensed providers and prudential rules that reflect business risks. France’s regulator said the MiCA transition ended in July 2026 for providers lacking the required authorization. Those existing licensing rules differ from the proposed liability framework.
According to the update, recommendations would affect the wider EU crypto regulation debate, beyond access to decentralized protocols. They concern where regulators exercise authority and how firms manage risks across different services.
Stablecoin Proposals Add Another MiCA Debate
The French authorities also advocated greater support for euro-denominated electronic money tokens and tokenized bank deposits. They wanted clearer restrictions on regulated providers offering services linked to noncompliant stablecoins.
Their proposals addressed tokens issued in the European Union and third countries under shared arrangements. France called for equivalent safeguards, supervisory cooperation, and stronger protections around reserves and redemption rights.
For the DeFi regulation debate, stablecoin proposals add another question about cross-border responsibility. France’s crypto regulation priorities also extend to payments and the treatment of services outside MiCA.
Article 140 of MiCA requires the European Commission to report to lawmakers by June 30, 2027. The report can accompany proposed amendments, although the deadline does not guarantee any particular policy outcome.
Until lawmakers act, the DeFi regulation proposal remains a French position rather than binding European Union law. Platforms should distinguish these prospective duties from the requirements that MiCA already imposes today.
