The European Union Parliament has taken the important step of outlawing anonymous self-custodial crypto wallets for payments across the region.
recent social media post EU Member of Parliament Patrick Breyer revealed that the ban was approved by the majority of the Parliamentary Leadership Committee on March 19th. The measures are part of the EU's broader anti-money laundering (AML) legislation.
How Europe’s new AML regulations will impact cryptocurrencies
The new regulation bans all anonymous cryptocurrency payments and cash transactions above certain limits. Specifically, cash payments exceeding 10,000 euros and anonymous cash transactions exceeding 3,000 euros are prohibited. This ban also covers self-custodial wallets on mobile, desktop, or browser applications.
The law is expected to come into force within three years, but there are indications that it could happen sooner.
Nevertheless, the new regulations will reshape the way Europeans interact with digital currencies. Its strict stance on anonymity has also raised concerns about user privacy and financial inclusion. Additionally, this regulation could pose a significant barrier to innovation and hinder the widespread adoption of cryptocurrencies in the region.
Read more: Cryptocurrency regulation: What are the advantages and disadvantages?
Breyer, who has been a vocal opponent in Congress, argued that the ban could affect law-abiding citizens more than it would curb criminal activity. He stressed that anonymous payments have served a legitimate purpose.
He cited examples such as donations to individuals like Alexei Navalny and organizations like WikiLeaks. Additionally, he emphasized the importance of financial privacy in personal transactions.
Breyer also expressed concern that increased oversight of financial transactions could unintentionally facilitate malicious activity by hackers and infringe on personal freedoms.
“We need to find a way to bring the best features of cash into the digital future. We also need to find ways to bring the best features of cash into the digital future. If the EU believes it can regulate cryptocurrencies on its own, it doesn't understand the global internet,” Breyer said. said.
Similarly, members of the crypto community have expressed doubts and concerns about the scope of the ban on anonymous payments. One user in particular said, Ban extends to all cryptocurrencies Or only those classified as privacy coins.
Notably, several cryptocurrency exchanges, including Binance and OKX, have delisted some privacy-focused tokens for European users.
Read more: Top 8 Binance Card Alternatives Available in Europe in 2024
Meanwhile, Circle's director of research and policy, Patrick Hansen, explained that self-custodial wallets and payments from such wallets are not prohibited. Additionally, peer-to-peer transfers are expressly excluded from the regulation.
“Cryptocurrency payments (e.g. to merchants) using non-KYC self-custodial wallets will be more difficult or prohibited depending on the merchant you set them up with. This change and the lower threshold for anonymous cash payments “Unfortunately, this was agreed months ago,” he added.
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