During the last couple of months, the European Parliament (EP) and Commission (EC) have been actively involved in discussion of appropriate regulation for the digital currency market. Now, recent reports indicate that the EP has voted for a stricter array of regulations for the crypto market.
With this in mind, once the legislation is applied at the European Union level, crypto exchanges alongside wallet providers will be required to introduce specific due diligence procedures for their customers. In other words, wallets and exchanges may soon have to begin verifying user identity. Additionally, the measures also point out that crypto wallets and exchanges will need to register before being allowed to offer their service.
The new measures are part of the EU’s updates on the EU Anti-Money Laundering Directive. The decision passed the vote with 574 votes, out of which 13 were negative and 60 were abstentions. According to the EP, the amendments to the crypto regulation are meant to further address the risks associated to digital currencies, such as ending anonymity, and ensuring that digital funds aren’t being used for money laundering purposes.
Together with this, the EP also voted for laws that will target user anonymity provided by several payment card issuers, such as Visa, MasterCard and more. Now, the amount that unregistered users of virtual and prepaid payment cards can spend has been reduced from €250 to €150. This decision is also bound to affect companies that offer crypto-to-fiat exchange as non-custodial services.
It is worth pointing out the fact that the new Anti-Money Laundering Directive, including the amendments mentioned above, will have legislative effect three days after publication in the Official Journal of the EU. However, as the EU is not federal, but rather an international organization, this means that EU member states do not have to implement the legislation immediately. Rather, they will have 18 months for the EU laws to be transposed into state law, yet it usually takes longer than this, especially with controversial matters.
Despite the EP’s efforts, the cryptocurrency market is not commonly regulated throughout the European Union, as different regulatory approaches are present. While certain countries have chosen to not impose tax, others have decided to apply their actual tax codes for crypto-based income. 22 EU-member countries have signed the Declaration on the Establishment of the European Blockchain Partnership, meant to ensure that similar regulatory approaches are being followed – the document, however, doesn’t cover similar rules for digital currencies.
Based on everything that has been outlined so far, what are your thoughts on the latest European Parliament decision? Let us know your thoughts in the comment section below.