European Parliament to impose a limit of $1,000 on unverified crypto payments
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(Kitco News) - As lawmakers in Europe work to finalize their approach towards regulating cryptocurrencies, the ability to anonymously hold and transact digital assets has just been diminished as the European Parliament has voted in favor of imposing limits on payments by unverified crypto users.
According to a press release posted by the Parliament, lawmakers on the Economics and Civil Liberties committees voted on Tuesday in favor of the new anti-money laundering (AML) and terrorist financing regulation, which seeks to impose a $1,000 cap on transactions coming from unverified crypto wallets.
“Entities, such as banks, assets and crypto assets managers, real and virtual estate agents and high-level professional football clubs, will be required to verify their customers’ identity, what they own and who controls the company,” the release said. “They will also have to establish detailed types of risk of money laundering and terrorist financing in their sector of activity, and transmit the relevant information to a central register.”
The limit is part of the EU’s overhaul of its AML regulations. The plans were considered alongside other measures designed to restrict businesses from accepting large cash payments from anonymous sources.
As part of the overhaul, the Parliament also voted to create a new European Union Anti-Money Laundering Agency, the AMLA, which has been granted supervisory and investigative powers “to ensure compliance with AML/CFT requirements.”
The AMLA will be tasked with monitoring risks and threats within and outside the EU and will directly supervise certain credit and financial institutions and classify them according to their risk level. MEPs also want to give AMLA the powers to mediate between national financial supervisors and settle disputes, ensure stronger oversight of the supervisors in the non-financial sector and receive whistleblower complaints.
A total of 99 lawmakers voted in favor of the new plan, while there were six abstentions.
Damien Carême, the French lawmaker who leads the parliament’s negotiations on the overhaul, told reporters that the law would not prohibit crypto payments because the cap only applies to unregulated wallets and unverified wallets. “We are absolutely not preventing crypto transactions. It’s just when identification isn’t possible.”
The proposed regulations will now go through several weeks of negotiations before advancing to a plenary vote in Parliament. From that point, it will advance to inter-institutional negotiations between the Parliament, Council, and European Commission.
|EU Parliament approves the Data Act, which requires "kill switches" for smart contracts|
CBDC warning from ECB president Lagarde
In other news, out of Europe, European Central Bank’s (ECB) president Christine Lagarde recently said that the reputation of central banks may lose their roles as the anchor of the financial system if they fail to adopt central bank digital currencies (CBDCs).
“Where do we stand, we Central Bankers? We have been operating as a monetary anchor in relation to Commercial Banks and private money,” said Lagarde. “If we are not in that game, if we are not involved in experimenting and innovating in terms of digital central bank money, we risk losing the role of anchor that we have played for many, many decades.”
The ECB president went on to highlight points in history when a central bank wasn’t available to serve as the “monetary anchor,” which she said “precipitated crisis after crisis.”
“Do we want to go back to those days?” Lagarde questioned. “Probably not. I would say certainly not from our vantage point. As a result of which, we have to respond to the demand for those digital payments in order to maintain the role of anchor that we have been playing regularly.”
These comments from Lagarde largely echo previous comments from Fabio Panetta, an executive board member of the ECB, where Panetta stressed the need for crypto regulations and the adoption of CBDCs and highlighted the anchoring role that central banks serve.