EU Votes to Ban Cryptocurrency Payments to Hosted Wallets in New AML Law

EU parliament building and cryptocurrencies

The EU Parliament’s lead commission has greenlit new AML laws, including a ban on cryptocurrency payments to “hosted wallets” via unidentified self-custody wallets. Patrick Breyer and Gunnar Beck, the two dissenting voices, expressed concerns over the potential impact on financial freedom and the efficacy of such measures in combating crimes. Historically, EU citizens have opposed cash payment prohibitions, emphasizing the importance of anonymity in financial transactions and questioning the effectiveness of such restrictions in curbing criminal activities.

Combating Financial Crimes

In a move aimed at tightening regulations on cryptocurrency transactions, the European Union (EU) has passed new anti-money laundering (AML) laws that include a ban on cryptocurrency payments to “hosted wallets” using unidentified self-custody wallets. The decision, approved by the majority of the EU Parliament’s lead commission on March 19, signals a significant shift in the regulatory landscape for digital assets within the region.

The prohibition on certain cryptocurrency payments forms part of a broader set of measures designed to combat financial crimes and enhance transparency in the crypto sector. Under the new legislation, any cash payment above €10,000 will also become illegal, along with anonymous cash payments exceeding €3,000.

Disssenting Opinions

Patrick Breyer, a member of the European Parliament representing the Deutsch Piraten Partei, and Gunnar Beck from the Alternative for Germany (AfD) party were among the few who opposed the approval of the new AML laws. Breyer expressed skepticism about the effectiveness of such measures in combating crimes, highlighting the importance of anonymous payments as a fundamental human right essential for individual financial freedom.

Moreover, Breyer cautioned against the potential negative economic and social repercussions of prohibiting sovereign payments, emphasizing the threat of increased dependence on banks and financial disenfranchisement.

A Balancing Act

The decision to ban cryptocurrency payments to hosted wallets represents a step by the EU in regulating digital assets and addressing concerns related to money laundering and financial crimes. However, it has sparked debates over the balance between regulatory oversight and individual privacy rights, with critics questioning the efficacy of such measures and highlighting the importance of preserving financial freedom.

As the new AML laws are set to come into effect, further discussions and debates are expected to unfold regarding their implications for the cryptocurrency industry and the broader financial ecosystem within the European Union.

Author: Grace

Grace likes gardening. She holds some BTC and ETH.