Francois Villeroy de Galhau, the governor of the Central Bank of France, has warned of arbitrage risks that may be fueled by uneven crypto regulations on a global scale.

As reported by Reuters, Villeroy was quoted as saying that the failure of some countries to develop regulations to govern the broader crypto ecosystem may quickly create a safe haven for global players in the emerging industry.

“We should be extremely careful to avoid adopting divergent or contradictory regulations or regulating too late,” Villeroy said in a statement at a digital finance conference in Paris. According to him, failure to provide strong regulations “…would be to create an uneven playing field, risking arbitration and selective selection.”

As far as Villeroy is concerned, the bottom line that regulators are seeking, including protecting consumers and preventing money laundering, may not be achieved.

Villeroy’s comments follow the push from key European Union regulators, including the Central Bank, Parliament and Council, which agreed to the Markets in Crypto Assets (MiCA) framework earlier this year. The framework is comprehensive and is set to usher in a standard for the crypto industry at a time when most other economies, including the United States, are still largely in the early stages of their regulatory designs. .

With details on MiCA now finalized, Villeroy said he anticipates full implementation to begin next year in March.

Harmonizing crypto regulations has been a very difficult move. While G7 and G20 member states have made some attempts to unify tax-related levies on tech startups and by extension crypto ecosystem players, the leniency of some smaller countries labeled as tax havens still can make this move a long shot.

Unless global regulators find a way to set a standard that most local regulators can easily implement, the regulatory approaches of nations will always be uneven.

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