EU to Ban Anonymous Crypto Wallets and Transactions

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  • The EU aims to bring a ban on anonymous cryptocurrency transactions and anonymous wallets.
  • It argued that this latest move would help enforce anti-money laundering (AML) standards.
  • The proposal requires halting crypto transactions of more than €10,000.

The European Union has submitted a proposal asking for a ban on anonymous cryptocurrency transactions and anonymous wallets. The European Commission (EC), which is responsible for proposing legislation and enforcing European Union (EU) laws, argues that this move is part of a larger plan to enforce anti-money laundering (AML) standards.

The 52-page proposal by the EC suggests a number of projects to be launched. As per the proposal, these projects will further assist the EC in the supervision and enforcement of regulations with respect to financial transactions.

The EU proposes a new branch with a crew of approximately 250 members to be launched, mainly for supervising high-risk businesses and halting transactions of more than €10,000 (equivalent to around $11,750).

In particular, this new proposal demands firms that allow Bitcoin and other crypto-assets transfers to collect a satisfactory amount of personal data from both senders and recipients. The EU expects these new magnified regulations to help diminish money laundering and other illegal activities associated with cryptocurrencies.

The proposal, which is intended for the European Parliament and the Council of the European Union, asserts:

Until now, transfers of virtual assets have remained outside of the scope of Union legislation on financial services, exposing holders of crypto-assets to money laundering and financing of terrorism risks, as flows of illicit money can be done through transfers of crypto-assets and damage the integrity, stability and reputation of the financial sector.

Moreover, the European Commission added in a press release that besides banning suspicious crypto transactions, they will also outlaw anonymous crypto wallets. “In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector,” the Commission said.

Lawmakers Around The Globe Are Targeting Cryptos

Over the last few days, policymakers and officials from everywhere exhibited concerns regarding the largely unregulated ecosystem of cryptocurrencies. Just recently, the US Treasury Secretary Janet Yellen stated that the US lawmakers should “quickly” regulate stablecoins.

Following Yellen’s comments on stablecoin regulation, the US Treasury Department said in a statement that they will act quickly to create a regulatory framework for stablecoins. “The Secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place,” the statement read.

Prior to this, two prominent financial experts, Yale professor of finance Gary Gorton and Federal Reserve attorney Jeffery Zhang had matched stablecoins to the Free Banking Era. The pair also suggest a regulatory framework for stablecoins, with one option including the ousting of stablecoins thorough replacement by CBDCs.