Lawmakers in the European Union (EU) will vote on a new set of crypto regulations on Tuesday that could ban large crypto transfers from self-hosted wallets.
The new regulations are part of a renewed focus in the EU on crypto and its potential use for money laundering. EU lawmakers will, among other things, decide on whether anonymous crypto transactions over €1,000 ($1,080) should be outright banned unless a regulated service provider is involved.
The proposal would, in other words, outlaw all transfer over €1,000 from one non-custodial wallet to another. Such transactions represent a large part of the crypto economy today, and non-custodial wallets are often advocated for by crypto proponents for the security and control it gives individual users.
Custodial wallets, on the other hand, takes control away from individuals. Recent history is full of examples of users who have lost their funds due to trusting crypto service providers with their money.
The voting will happen in the Economics and Civil Liberties Committees of the European Parliament. The proposal will need the approval of both the European Parliament and the European Council before it becomes law.
In addition to the new restrictions on crypto transactions, the proposed legislation also introduces new restrictions on cash transactions. For instance, the proposal is said to ban businesses from accepting cash payments of more than €7,000.
EU lawmakers are known to take a tough stance on crypto, and have in the past proposed legislation to better monitor decentralized finance (DeFi) activity. The EU has also recently implemented MiCA, which acts as a strict regulatory framework for the entire crypto and stablecoin sector in Europe.
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