The European Union (EU) is set to vote on a new set of Anti-Money Laundering (AML) laws that may impose some significant restrictions on transactions involving the crypto market. According to recent clarifications given by Damien Carême, a French lawmaker from the Green party, the new restrictions will be based on scenarios where the sender cannot be identified.
“We are absolutely not preventing crypto transactions,” Damien told reporters. “It’s just when identification isn’t possible.”
Based on the designations of service providers in the digital currency ecosystem at this time, this regulation, if passed, will affect unhosted or non-custodial wallets. These wallets are increasingly becoming common especially with the growing narrative that crypto users should pay closer attention to self custody of their digital currencies.
This school of thought became prevalent with the collapse of some of the best crypto service providers over the past year. From Celsius Network to Voyager Digital and BlockFi, the confidence to trust these legacy crypto platforms with one’s earnings or capital has become quite eroded over time.
With billions of users’ capital currently locked up in vaults awaiting sufficient liquidity to resolve bankruptcy woes, more crypto owners are turning to unhosted wallets. Herein lies the major dilemma that the restriction the EU is trying to impose is billed to solve.
Once the new regulation passes, the report has it that the “Anti-Money Laundering Regulation set to be discussed by the Economic and Civil Liberties Committees would impose a limit of 1,000 euros ($1,080) for payments” originating from self-hosted wallets.
This regulation will be fine-tuned to make it more coherent for industry stakeholders to abide by it.
EU and the Growing Crypto Scrutiny
As far as the EU is concerned, it is gradually advancing in its crackdowns on the crypto industry through functional regulation. While the Markets In Crypto Assets (MiCA) regulation that was passed by the trio of the Parliament, Commission, and Council last year has its restrictions, these accompanying regulations that are targeted to make it whole are also compounding the strain.
Damien believes the new regulation will not impact the normal or regular transactions of digital assets and that there will be no need to worry so much about privacy coins including Dash and Monero (XMR) which have already been taken care of by MiCA.
The newly proposed regulation to restrict transactions on unhosted wallets is due for voting in a few hours and industry experts are focusing keenly on the direction of the proceedings. This is because this move can either stifle innovation or create a new path for the innovators in the industry to pursue the right legalization procedure that will enable them to sit as a business cogent.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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