The European Union is set to implement new anti-money laundering (AML) and counter-terrorism financing laws that will significantly impact the cryptocurrency market.
A majority of the EU Parliament’s lead committees have approved a ban on anonymous crypto transactions of any value made through hosted or custodial crypto wallets offered by third-party service providers, such as centralized exchanges.
Key points:
- The EU Parliament’s lead committees approve a ban on anonymous cryptocurrency transactions.
- New AML legislation applies limits to cash transactions and anonymous cryptocurrency payments.
- Anonymous cash payments over 3,000 euros will be banned in commercial transactions.
- Cash payments over 10,000 euros will be completely banned in business transactions.
- The legislation is expected to be fully operational within three years of its entry into force.
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The decision comes after the European Council and Parliament provisionally agreed to expand parts of the EU’s AML and counter-terrorism financing laws to cover the cryptocurrency market.
Only two EU Parliament members voted against crypto transaction ban
Patrick Breyer, a member of the European Parliament for the Pirate Party of Germany, and Gunnar Beck of Alternative for Germany were the only two members who voted against the ban on anonymous crypto payments.
The new rules will prohibit anonymous cash payments over 3,000 euros in commercial transactions. Additionally, cash payments over 10,000 euros will be completely banned in business transactions.
The legislation is expected to become fully operational within three years of its entry into force. However, the Ireland-based law firm Dillon Eustace anticipates an earlier implementation.
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The ban on anonymous cryptocurrency transactions has raised concerns among some members of the crypto community. This is because many cryptocurrency networks operate in permissionless environments.
In a press release following the lead committees’ approval of the legislation, Patrick Breyer outlined his reasons for opposing the bill. He stated that it compromises economic independence and financial privacy. Additionally, he emphasized that he considers the ability to transact anonymously a fundamental right.
