The leading committee of the European Parliament has greenlit a proposal to ban cryptocurrency transactions through custodial crypto wallets, regardless of their value. This decision follows tentative agreements between the European Council and Parliament to extend elements of the EU's anti-money laundering (AML) and counter-terrorism financing regulations to the crypto sphere.
Patrick Breyer, a member of the European Parliament's Piratenpartei Deutschland (German Pirate Party), revealed in an X post that the new anti-money laundering law was approved by a majority of the EU Parliament's Leadership Committee on March 19. Breyer and Gunnar Beck of the Alternative für Deutschland were the only two members to vote against a ban on anonymous crypto payments. The ban specifically targets custodial crypto wallets provided by third-party service providers like centralized exchanges.
Under the upcoming regulations, anonymous cash payments exceeding 3,000 euros in commercial transactions will be restricted, with transactions over 10,000 euros completely prohibited. The legislation is slated for full implementation within three years of enactment, although some anticipate it may be implemented sooner, according to insights from Ireland-based law firm Dillon Eustace.
The move towards tighter regulation has stirred debate within the cryptocurrency community. While some argue that anti-money laundering measures are necessary for legitimacy, others express concerns over potential privacy breaches and constraints on economic activity. Breyer, in a press release following the committee's approval, criticized the legislation for undermining economic independence and financial privacy, stressing the importance of anonymous transactions as a fundamental right.
Critics, such as Daniel "Loddi" Tröster, host of the Sound Money Bitcoin Podcast, highlight the practical challenges and repercussions of such legislation. Tröster outlines concerns regarding the impact on donations and broader cryptocurrency usage within the EU, expressing apprehension about potential disincentives created by the regulatory framework.
