EU Bans Anonymous Crypto Payments Over €3,000 Using Self-custody Wallets

Key Points:

• EU Parliament committees approve legislation banning anonymous crypto payments.
• The new laws cap anonymous cash payments at €3,000 and completely prohibit transactions exceeding €10,000.
• The ban targets hosted or custodial crypto wallets provided by third-party service providers, like centralized exchanges.

The European Union Parliament‘s lead committees have greenlit a significant legislative move aimed at curbing anonymous crypto payments, sparking widespread debate and signaling a significant shift in digital currency regulation across the bloc.

EU Parliament Advances Legislation to Ban Anonymous Crypto Payments

This legislative package, which focuses on anti-money laundering (AML) measures, extends its reach beyond cryptocurrencies to include stringent restrictions on cash transactions, constituting one of the boldest regulatory endeavors globally.

According to Patrick Breyer, a member of the European Parliament for the Piratenpartei Deutschland, the majority of lead committees endorsed the new AML laws on March 19, with only two members, including Breyer and Gunnar Beck of Alternative für Deutschland, opposing the ban on anonymous crypto payments. Particularly, hosted or custodial cryptocurrency wallets provided by outside service providers—like centralized exchanges—are prohibited.

Under the legislation, anonymous cash payments in commercial transactions are capped at €3,000, with transactions exceeding €10,000 completely prohibited. Moreover, all transactions involving cryptocurrencies in hosted wallets must be fully traceable, eradicating anonymity even for minor transactions.

Debate Erupts Over Privacy Concerns Amid EU’s AML Measures

EU authorities argue that these measures are vital in combating money laundering, terrorism financing, and tax evasion. However, the sweeping nature of the laws has ignited concerns regarding privacy rights and individual freedoms among EU citizens.

The new regulations are set to come into full effect within three years, though some anticipate an earlier implementation. Notably, there are concerns within the cryptocurrency community regarding the breadth of the ban on anonymous payments, with questions raised about its application to all cryptocurrencies or solely those classified as privacy coins.

As the EU progresses with the enforcement of these AML laws, there’s growing apprehension about their potential impact on financial liberties and privacy. The decision has triggered dialogue among citizens and entrepreneurs, underscoring the delicate balance between regulatory oversight and individual rights in the digital era.