EU cryptocurrency crackdown: Bloc plans more red-tape as UK urged to embrace new tech

Brussels’ plan is to ban private wallets to “ensure full traceability” in transactions to stop “money laundering or terrorism financing”. Cryptocurrency wallets are usually anonymous and can be set up without the need for third-party authorisation such as a bank. Now the EU wants to eradicate the anonymity of digital wallets, one of the key signatures of the cryptocurrency revolution.

Another tactic employed by the EU is to prohibit cryptocurrency payments higher than 10,000 euros (£8562) between crypto-wallets.

At a news conference on Tuesday EU financial services commissioner, Mairead McGuinness said: “We shouldn’t have different rules for the financial system.

“They should apply across digital currencies as well.”

The new proposals would have to be approved by the European Parliament and the European Council.

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The EU then hope to create a new anti-money laundering body to monitor cryptocurrency transactions.

The bloc’s so-called Anti-Money Laundering Authority plans to use a single integrated system to supervise cryptocurrency transactions throughout and if the EU parliament and council agree it will be established by 2024.

The European Commission said in a press release that the new body “will ensure full traceability of crypto-asset transfers, such as Bitcoin”.

The statement continued: “It will allow for prevention and detection of their possible use for money laundering or terrorism financing.”

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The move comes as the City of London is embracing cryptocurrency developments, with the former CEO of London Stock Exchange Xavier Rolet calling on post-Brexit Britain to capitalise on the crypto-boom and attract the “best brains” to the capital.

In a recent blog post co-authored by Mr Rolet, he states that in the post-Brexit era the UK needs to understand cryptocurrencies in order to place the City of London and the nation at the centre of a “reputable and safe” financial market.

In the blog post, he stated: “Doing so will not be easy, none of this stuff is.

“However, it is essential to be well-positioned, otherwise the cryptocurrency market will pass the UK by.”

In a recent report by financial analysts, the UK Government was urged to assist the City of London in offering “crypto-assets” for cryptocurrencies such as Bitcoin and Ethereum.

The study suggested the UK Government and regulators should leverage Brexit and capitalise on the opportunities arising from the rapid growth of crypto-assets.

The analysts urged the City of London financial centre to become a world leader in Distributed Ledger Technology (DLT) as it is currently viewed as a high-growth, high-potential sector.

Referring to the growth of the cryptocurrency sector, financial industry lobby group TheCityUK said the UK Government should use its “new trade policy as a vehicle” to position itself at the forefront of finance’s “next generation of technological developments”.

Roy Walsh

Roy Walsh

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