French regulator approves the BPCE subsidiary for crypto operations.

In a notable milestone for the French cryptocurrency ecosystem, BPCE's subsidiary, Hexarq, has secured regulatory approval from France’s financial markets authority, the Autorité des Marchés Financiers (AMF). This makes Hexarq the second crypto-focused subsidiary of a major French bank to receive AMF authorization, following Société Générale’s Forge.

The AMF granted Hexarq its Crypto Asset Service Provider (CASP) authorization on December 20, as per an official announcement. This approval permits Hexarq to offer a range of cryptocurrency services, including custodial services, as well as the buying, selling, and trading of cryptocurrencies against the euro.

Founded in January 2021, Hexarq is a digital asset service platform specializing in cryptocurrencies and tokenized real-world assets (RWAs). The platform is a core part of BPCE’s foray into the cryptocurrency industry, and this latest authorization is expected to significantly enhance its capabilities.

Hexarq plans to integrate its cryptocurrency application into BPCE’s two primary banking networks, Banque Populaire and Caisse d'Épargne, by 2025. This will enable the banking group’s extensive customer base of 35 million individuals to access secure and regulated crypto investment services directly through their banking channels.

BPCE, one of Europe’s top 10 largest banks, manages assets totaling approximately €1.3 trillion ($1.3 trillion) as of September 2024. With its massive customer base and financial clout, the entry of BPCE into the crypto market is poised to drive significant adoption and legitimacy within the industry.

According to reports, BPCE’s Hexarq aims to begin offering cryptocurrency investment services by 2025, though the bank has declined to provide further specifics on the rollout timeline or features of the planned services.

Hexarq’s approval marks it as the fourth crypto business to receive CASP authorization from the AMF. It joins an exclusive group of regulated players, including Société Générale’s Forge, which was authorized in 2023, and Deblock SAS and GOin SAS, which received their approvals in June 2023 and September 2022, respectively.

The AMF began accepting CASP applications in August 2024, in preparation for the upcoming Markets in Crypto-Assets (MiCA) regulations, which are set to take full effect on December 30, 2024. The regulatory framework under MiCA aims to create a uniform and comprehensive set of rules for crypto-asset service providers across the European Union.

Hexarq’s AMF authorization highlights a growing trend among traditional financial institutions to embrace digital assets. By embedding cryptocurrency services within its banking networks, BPCE demonstrates a commitment to meeting the evolving demands of its customers while aligning with stringent regulatory standards.

As the regulatory landscape continues to mature, initiatives like Hexarq could play a pivotal role in bridging the gap between traditional finance and the burgeoning world of cryptocurrencies, further solidifying France’s position as a leader in crypto regulation and innovation.