The European Union (EU) has implemented a ban on cryptocurrency transactions conducted through non-custodial wallets without verification as part of its broader Anti-Money Laundering (AML) directives. This move, approved by a majority of the European Parliament’s leading commission on March 19, aims to address concerns regarding anonymous transactions and enhance financial transparency within the region, Coingape reported.
The regulation specifically targets transactions facilitated by mobile, desktop, or browser applications lacking proper identification. It seeks to close loopholes enabling the anonymous movement of funds, with the ban applying to cash transactions exceeding €10,000 and anonymous cryptocurrency payments exceeding €3,000.
The legislation is scheduled to be fully implemented within three years, although experts anticipate a faster adoption. The regulations are expected to significantly impact the cryptocurrency market landscape in the EU, introducing stringent compliance requirements for financial operations involving cash and anonymous crypto transactions.
Resistance to the regulations has been notable, with dissent from German MEP Patrick Breyer and Gunnar Beck of the Alternative for Germany party. They have raised concerns about potential violations of financial privacy and individual autonomy, arguing against the encroachment on the right to engage in anonymous transactions.
In response to the regulations, the cryptocurrency sector has expressed apprehensions about the potential impact on personal financial privacy and the broader adoption of cryptocurrencies within the EU. Some stakeholders have highlighted practical challenges, particularly regarding limitations on donations and the general use of digital currencies.
However, self-custody to self-custody transactions remain exempt from the new regulations, indicating a nuanced approach aimed at balancing regulatory oversight with the freedoms afforded by cryptocurrency networks.
