Key Takeaways
- The European Parliament's leading committees have approved legislation to ban anonymous cryptocurrency transactions.
- The legislation includes restrictions on anonymous cash transactions, with specific limits for commercial and business transactions.
- The decision has sparked debate within the cryptocurrency community, highlighting tensions between regulatory oversight and the preservation of privacy and autonomy in digital finance.
Update: Patrick Hansen, director of EU Strategy and Policy at Circle, has explained on X that a ban on anonymous crypto transactions was proposed in a previous version of the anti-money laundering (AML) legislation, however, this version has been scrapped.
According to him, the AML regulation will require crypto asset service providers to follow standard procedures, such as customer due diligence, which they are already subject to under the current AML directive.
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Non-custodial Wallet: Why Do You Need It Right NOW
The European Union is taking significant steps towards tightening the reins on the cryptocurrency market by introducing new laws aimed at anti-money laundering (AML) and countering terrorism financing.
The European Parliament's leading committees have given their nod to a proposal to ban anonymous crypto transactions.
This encompasses transactions of any value executed through hosted or custodial wallets provided by third parties, such as centralized exchanges.
The push for stricter regulation follows an agreement between the European Council and Parliament to broaden the scope of the EU's AML and counter-terrorism financing directives to include the crypto market.
However, the ban has not been without its critics. Patrick Breyer from the Pirate Party of Germany and Gunnar Beck from Alternative for Germany stood against the majority, voicing concerns over privacy and economic freedoms.
The forthcoming legislation also sets forth limitations on anonymous cash transactions, imposing a cap of 3,000 euros for commercial dealings and outright banning cash transactions exceeding 10,000 euros in a business context.
The legislation is expected to be fully operational within three years from its effective date.
As the crypto community grapples with these changes, the implications of this legislation will undoubtedly be felt worldwide, challenging the notion of anonymity that has long been central to the ethos of crypto transactions.
In other news from the European crypto regulation front, the European Banking Authority (EBA) has recently issued the final draft Regulatory Technical Standards (RTS) specifically targeting stablecoins tied to multiple currencies.
