Yesterday, the European Parliament and the Council made a deal on the rules for crypto assets. Anonymous payments will effectively be prohibited, interfering with the fundamental characteristics of decentralised finance. Even the €1000 limit for anonymous transactions proposed by the EU Commission has been abandoned. All users of hosted wallets will need to identify, as well as users sending unhosted funds to hosted wallets. Crypto exchanges will have to be extra diligent regarding their dealings with unregistered or unlicensed entities outside of the EU.
Pirate Party MEP Patrick Breyer, Member of the LIBE Committee who voted against the negotiating mandate, comments:
“These rules will deprive law-abiding citizens of their financial freedom. For example, opposition figures like Alexei Nawalny are increasingly dependent on anonymous donations in virtual currencies. Banks have also cut off donations to Wikileaks in the past. With the creeping abolition of real and virtual cash, there is the threat of negative interest rates and the shutting off of the money supply at any time. We should have a right to be able to pay and donate online without our financial transactions being recorded in a personalised way.
There is no justification for effectively abolishing anonymous virtual payments: Where Virtual Assets have been used for criminal activities in the past, prosecution has been possible on the basis of the current rules. Banning anonymous crypto currency payments altogether will not have any significant effect on crime. The stated aim to tackle money laundering and terrorism is only a pretext to gain control over our private business.”
The public opinion on the anonymous use of cash is that it is an “essential personal freedom”, according to the responses to the 2017 Commission survey on the desirability of limiting cash payments.