Privacy Crypto Tokens Could be Banned by the EU: Report

Paigambar Mohan Raj
Source: ChangeNOW

Privacy crypto tokens, such as Monero, Zcash, and Dash, might face restrictions in the EU (European Union) according to a leaked draft of a money laundering bill obtained by CoinDesk. The European Union may forbid banks and cryptocurrency service providers from transacting with such tokens.

According to reports, the plans from Czech authorities, who are leading discussions among EU nations on the proposed bill, are against the notion of anonymous payments.

According to CoinDesk, the legislative draft stated,

“Credit institutions, financial institutions and crypto-asset service providers shall be prohibited from keeping …anonymity-enhancing coins.”

The document, which is dated November 9th, has reportedly been sent out for feedback to the other 26 nations that make up the bloc.

According to an EU ambassador who spoke to CoinDesk, the policy was put in place to reduce the danger associated with crypto assets that are made intentionally to be untraceable. The prohibition on privacy coins, which prevent eavesdropping on blockchain activities, is meant to correspond to the original law proposal’s prohibition on anonymous financial instruments like bearer shares and anonymous accounts.

The diplomat, who spoke on the condition of anonymity because the negotiations were taking place behind closed doors, stated that the Czech proposal is in response to a demand from nations debating the text.

The European Commission proposed the Anti-Money Laundering Regulation in July 2021 as a component of a package that included a ban on big cash transactions and the establishment of a new anti-money laundering agency, AMLA, to oversee procedures at major financial institutions.

Plans in the Czech Republic would require crypto asset providers to confirm customers’ identities even for infrequent payments of less than 1,000 euros ($1,040) and to inquire about the nature and purpose of the business for larger payments. Due diligence regulations would then be more stringent than for other types of businesses like banks, where they only apply to bigger payments due to concerns that cryptocurrency payments could be easily divided into smaller pieces.

Watcher Guru has reached out to an EU Diplomat for comment but has not received a response yet.