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The European Union recently announced that the use of self-custody wallets for crypto payments is now illegal. This significant decision is part of the continent’s efforts to combat money laundering. Let’s take a closer look at the details.
Crypto Currency Law Approved on March 19
The leading committee of the EU Parliament, according to Patrick Breyer’s statement, approved this ban on March 19. Dr. Breyer, a member of the European Parliament from Germany’s Deutsch Piraten Partei, stands out as one of the leaders opposing this ban. Another Parliament member who voted against it was Gunnar Beck from the Alternative for Germany (AfD) party.
The new anti-money laundering law partially criminalizes cash payments and anonymous crypto payments by setting certain limits. Cash payments over 10,000 Euros and anonymous cash payments over 3,000 Euros will now be considered illegal.
The ban on crypto currencies will be specific to unidentified wallets operated by providers. This includes any self-custody wallet provided through mobile, desktop, or browser applications.
To Be Effective Three Years After Enactment
According to Dillon Eustace, the AML package now approved will take effect three years after its enactment. However, the Irish law firm expects these laws to become fully operational before the usual implementation timeline.
Breyer is skeptical about the effectiveness of these laws in combating crimes. Moreover, he argues that anonymous payments are a fundamental part of individual financial freedom. He believes that “banning anonymous payments will at best have a minimal effect on crime, but will deprive innocent citizens of their financial freedoms. (…) We have the right to make online payments and donations without our personal transactions being recorded.”
The representative of Piraten Partei offers a different perspective. He highlights the economic and social impacts of banning sovereign payments and says:
“The war the EU has declared against cash will have adverse repercussions! For thousands of years, societies around the world have lived with cash that protects privacy. With the gradual elimination of cash, risks such as negative interest rates and banks’ ability to cut off money supply at any moment emerge. Dependence on banks is increasing at an alarming rate. Such financial rights deprivation must be stopped.”
Emphasis on Financial Freedom
These words provide a significant contribution to the discussions on the ban of anonymous payments. The protection of financial freedom and personal privacy is becoming increasingly important in the digital age. However, other factors such as combating crime and economic balance must also be considered. How this balance will be achieved is a process that will take shape over time.
The European Union’s (EU) new anti-money laundering law includes restrictions on cash and crypto payments. However, there are various opinions on how this step has been received by the public.
Throughout history, European citizens have resisted any restrictions on cash payments. When the Commission conducted a public survey on limiting cash payments in 2017, this resistance was evident. The majority of participants believed that anonymous cash payments are a fundamental personal freedom and that the imposed restrictions are ineffective in achieving their goals.
In particular, shadow economy expert Friedrich Schneider believes that such measures will have little effect on crime. This raises doubts among governments and authorities about the practical effects of restrictions intended to prevent money laundering and other criminal activities.
Highlighting the Impact on Human Rights
Regarding crypto currencies, it is indicated that new legal regulations will effectively ban crypto payments through self-custody wallets. This could threaten the fundamental characteristics of crypto currencies, such as financial freedom and accessibility.
Crypto currencies operate on permissionless networks and provide access to financial systems for everyone. This offers users financial freedom and a fair system. However, there are concerns that new regulations may hinder these features.
Many experts and freedom advocates think that such restrictions are a blow to financial freedom and basic human rights. Some find similarities with the dystopian society described in George Orwell’s novel “1984.”
Now, European citizens and business people are expressing their concerns about whether the EU Parliament can advance these laws. Political power and public support appear to be the decisive factors in this matter.
