The European Union (EU) is about to approve a fresh set of anti-money laundering (AML) legislation, which may put some major limits on transactions involving the cryptocurrency market if they are enacted as written.
Recent clarifications (1) provided by Damien CarΓͺme, a French senator affiliated with the Green party, indicate that the new limits will be predicated on circumstances in which the sender cannot be identified.
Damien assured the reporters, “We are in no way obstructing cryptocurrency transactions.” “This only applies in situations where identification is not possible.”
Unhosted or non-custodial wallets will be impacted if this legislation is enacted as written because of the current categorization of providers in the virtual currency ecosystem.
These wallets are becoming increasingly prevalent, particularly in light of the rising consensus among crypto users regarding the importance of paying closer attention to the self-custody of their digital assets.
The failure of some of the most successful crypto providers over the course of the previous year contributed to the rise in popularity of this school of thought.
From Celsius Network to Voyager Digital and BlockFi, the level of confidence required to trust these historical crypto platforms with one’s earnings or capital has significantly decreased over the course of recent years.
More crypto owners are going to unhosted wallets as they wait for sufficient liquidity to settle bankruptcy woes, resulting in billions of dollars worth of users’ capital being locked up in vaults.
This is the fundamental problem that the restriction that the EU is proposing to impose in order to remedy it is supposed to address.
According to the report, if the new regulation is approved, the “Anti-Money Laundering Regulation set to be debated by the Economic and Civil Liberties Committees would set a limit of 1,000 euros ($1,080) for payments” that originate from self-hosted wallets. This limit would go into effect once the law change is passed.
This legislation will be revised so that it is easier for many industry stakeholders to comply with it and make it more coherent.
EU and the Increasing Scrutiny of Cryptocurrencies
As far as the European Union is concerned, it is making slow but steady progress in its efforts to crack down on the cryptocurrency business by means of functional regulation.
The Markets in Crypto Assets (MiCA) legislation passed by the triumvirate of the Parliament, Commission, and Council the previous year has its constraints, but these additional regulations designed to make it whole are also aggravating the strain that is being put on the industry.
Damien is of the opinion that the new rule will not have an effect on the typical or typical transactions of digital assets and that there will be no need to worry as much about privacy currencies like Dash and Monero (XMR), because MiCA has already taken care of those concerns.
A vote on the new rule to restrict activities on unhosted wallets is scheduled to take place in a few hours, and industry professionals are concentrating intensely on the path that the proceedings will take.
This is because this step can either hinder innovation or open a new channel for innovators already working within the industry to follow the appropriate legalization procedure, which will enable them to sit as a corporate organization.
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