As part of its robust anti-money laundering (AML) strategy, the European Union Parliament has opted to prohibit unidentified self-custody crypto wallets utilized for transactions within the region. This recent decision, communicated by EU Parliament member Patrick Breyer, specifically targets cash transactions exceeding €3,000 and self-custody wallets across diverse platforms.

These fresh crypto regulations bar all anonymous crypto payments as well as cash transactions exceeding €10,000 or €3,000 for anonymous payments. The implementation of these regulations could potentially alter the way Europeans interact with digital currencies. Nevertheless, concerns have arisen regarding user privacy, financial inclusivity, and potential obstacles to crypto innovation due to the restrictions on anonymity.

Opposition to the new rules has surfaced, including objections from Breyer, who argues that they might disadvantage law-abiding citizens more than deterring criminals. Breyer underscores the significance of financial privacy for personal transactions and the risk of fostering malicious hacking activities and surveillance through heightened scrutiny of financial transactions.

The crypto community has also voiced apprehensions, questioning whether the ban on anonymous payments will encompass all cryptocurrencies or predominantly focus on privacy coins. This skepticism arises as numerous crypto exchanges in Europe, such as Binance and OKX, have initiated the delisting of privacy-focused tokens. Nonetheless, Circle’s Director of Research and Policy, Patrick Hansen, has clarified that self-custody wallets and peer-to-peer transfers are explicitly excluded from the new regulation.