Summary:
•The European Parliament, as part of its wider anti-money laundering efforts, has banned transactions using unidentified self-hosted cryptocurrency wallets within the region.
•The ban targets anonymous cash transactions over €3,000 and self-hosted wallets on various platforms.
•Opposition voices argue that the ban could have a disproportionate impact on law-abiding citizens and impede financial privacy.
The European Parliament has taken a major step towards banning the use of unidentified self-hosted cryptocurrency wallets for payments in the region.
A post on social media by EU Parliament member Patrick Breyer revealed that the ban was approved by a majority of the parliamentary leadership committee on March 19. The move is part of wider EU anti-money laundering (AML) legislation.
How Europe’s New AML Regulations Impact Cryptocurrencies
The new regulations ban all anonymous cryptocurrency payments and cash transactions above a certain limit. Specifically, they prohibit cash payments exceeding €10,000 or anonymous cash transactions exceeding €3,000. The ban also targets self-hosted wallets that are mobile apps, desktop software or web-based browser extensions.
Although the law is set to come into effect in three years, there are suggestions that its implementation could come sooner.
Nonetheless, the new regulations will reshape how Europeans use digital currencies. This also raises concerns about user privacy and financial inclusion due to its strict stance on anonymity. Additionally, the regulation could pose significant barriers to innovation and hinder widespread adoption of cryptocurrencies in the region.
Breyer, a dissenting voice in Parliament, argued the ban could impact law-abiding citizens rather than curb criminal activity. He emphasized that anonymous payments already serve legitimate purposes.
He gave examples of how to donate to individuals such as Alexei Navalny and organizations such as WikiLeaks. Additionally, he emphasized the importance of financial privacy in personal transactions.
Cryptocurrency community questions EU ban on anonymous payments
Breyer also expressed concern that increased surveillance of financial transactions could inadvertently facilitate malicious activities by hackers and infringe on personal freedoms.
Breyer said, “We need to find ways to bring the best features of cash into our digital future. We also have the right to pay and donate online using cryptocurrencies without our payments being gratuitously recorded. If If the EU thinks it can regulate virtual currencies on its own, it doesn’t fully understand the global internet.”
Likewise, members of the cryptocurrency community have raised questions and concerns about the scope of the anonymous payments ban. One user in particular asked for clarification on whether the ban would extend to all cryptocurrencies or only apply to those classified as privacy coins.
Notably, several cryptocurrency exchanges, including Binance and OKX, have delisted some privacy-focused coins for European users.
Meanwhile, Circle’s Director of Research and Policy Patrick Hansen explained that self-hosted wallets and payments from such wallets are not banned. Furthermore, peer-to-peer transfers are expressly excluded from the regulations.
He added, “Using non-KYC self-service wallets to make crypto payments (e.g. to merchants) will be more difficult/disabled, depending on the merchant’s setup. Unfortunately, this change, along with the lower threshold for anonymous cash payments, will This was agreed upon months ago." #欧盟 #反洗钱立法