To tackle money laundering and terrorist funding, the European Union has proposed capping anonymous crypto transactions at 1,000 euros ($1,083). The European Parliament said in a statement released on March 28 that the new restrictions would apply to transfers in which the recipient could not be identified. The maximum amount that might be spent in cash would be set at 7,000 euros ($7,585).
The idea will likely be approved at a plenary session in April as part of the Anti-Money Laundering and Countering the Financing of Terrorism package. The legislation’s ultimate form will be negotiated after that. After its establishment in June 2022, the European Anti-Money Laundering Authority (AMLA) will be responsible for enforcing the new legislation.
Emil Radev, co-supporter of the AMLA, emphasized the need for strong communication and coordination between the new body and national regulators. He also advocated for the AMLA to exercise direct oversight over the most high-risk service providers and financial institutions dealing with crypto assets across several member nations.
There were 99 yes votes, eight negative votes, and six abstentions on the language pertaining to anonymous instruments, which include crypto assets. The EU is attempting to combat the problem of money laundering and terrorism funding, and this step is part of a larger drive towards more openness in the financial industry.
Because of the anonymity they provide their owners with, crypto assets have long been suspected of being used in illegal transactions. The goal of the new rules is to improve the crypto industry by making its operations more open and accountable.
This proposal is part of a larger EU initiative to tighten up regulations on the banking sector. The European Central Bank has warned that cryptocurrencies may threaten financial stability and has urged a worldwide strategy to regulate them. The EU’s recommendations are in line with those of other nations, including China, which have taken steps recently to regulate crypto assets more strictly.
Many in the banking industry support the EU’s ideas, but others worry about the effect on privacy and the difficulty of implementing the new rules. Nonetheless, the EU is still dedicated to stopping the funding of terrorism and money laundering, and the new measures are one step in the right direction.
