In recent months, there has been much noise about the European Union’s impending threat to cryptocurrency. In particular, attention has been on the EU’s proposed Anti-Money Laundering Directive and its implications for BTC. Use the https://bwcevent.com/reviews/capitalix-review/ Software to use BTC to get wealthy.
There are concerns that these new rules will make it difficult or even impossible to use BTC to purchase everyday items like groceries or gas. It is easy to become confused by all of the different pieces of legislation and regulations currently being discussed. This article aims to cut through these complexities to better understand what they mean for you as a user of BTC or another cryptocurrency.
What is the EU Anti-Money Laundering Directive?
The European Union’s Anti-Money Laundering Directive. The European Parliament will approve the legislation in December 2018, and will go into effect in June 2020. The Fifth AML Directive is the latest iteration of a series of AML regulations passed in the EU since 2001. Each new version of the directive has attempted to keep up with changing technologies and the methods used by criminals to transfer and store money illegally.
How does the Anti-Money Laundering Directive affect BTC?
The proposed Fifth Anti-Money Laundering Directive has created great concern among cryptocurrency proponents. The primary worry is that the legislation will require cryptocurrency exchanges and wallet providers to be licensed and regulated as Money Service Businesses, or MSBs. It would force these companies to comply with complicated and burdensome regulatory requirements. Examples include:
Implementing “enhanced due diligence” and know-your-customer procedures.
Imposing minimum capital requirements.
Conducting independent audits of their operations.
Suppose the new EU regulations go into effect as currently drafted. In that case, it is likely that most exchanges and wallet providers will be unable to comply with these new rules and will shut down their operations. The Fifth AML Directive requires cryptocurrency exchanges to collect and retain detailed information about their customers, including their names, addresses, and copies of their identification documents.
It is a sensitive issue for privacy-conscious users of cryptocurrency. Many people are understandably uncomfortable with storing their data in a centralized database, especially if it is subjected to extensive regulation and government scrutiny. Privacy advocates have also expressed concerns about the extent to which criminals might be able to exploit details about cryptocurrency users that exchanges are required to collect. In short, the EU’s proposed AML regulations will likely have far-reaching and negative implications for the BTC community.
Will the EU’s Anti-Money Laundering Regulations Kill BTC?
Much concern about the EU’s proposed Fifth Anti-Money Laundering Directive focuses on whether it will kill BTC and other cryptocurrencies. Firstly, the increased regulatory scrutiny and compliance requirements that the new legislation would impose on cryptocurrency exchanges would make it significantly harder for new users to get involved with the technology.
Businesses would likely have to charge higher fees, putting crypto-assets out of the reach of many ordinary people. The EU’s AML regulations would make it significantly harder for smaller companies to function as exchanges. Cumbersome compliance requirements would put smaller companies at a significant disadvantage. It would increase the power of big, established businesses and make it even harder for smaller, less profitable companies to enter the market.
The Problem with EU Regulations on BTC
Several severe problems exist with the EU’s proposed Fifth Anti-Money Laundering Directive. First and foremost, the proposed legislation fails to acknowledge that cryptocurrency is not the same as fiat currency. Therefore, applying the same regulatory standards to companies that deal in cryptocurrency and use companies that sell in fiat makes no sense.
A second problem with the EU’s proposed Fifth Anti-Money Laundering Directive is that it fails to acknowledge the fundamental difference between centralized and decentralized systems. It is likely to result in overly burdensome and even counter-productive regulations. Cryptocurrency exchanges, for example, are centralized systems that store sensitive information about their users.
This information is vulnerable to hacks and other cyber threats. A genuinely consortium blockchain, in comparison, maintains extremely minimal data on its customers. It makes it much more secure than centralized systems. It is essential to recognize the difference between centralized and decentralized systems and to apply our regulations accordingly.
Final Words: Is the EU Killing BTC?
The EU’s proposed Fifth Anti-Money Laundering Directive is likely to have several negative consequences for the use of cryptocurrency in Europe. It will almost certainly make it harder for ordinary people to get involved with crypto-assets.
There are several reasons why the EU’s proposed Fifth Anti-Money Laundering Directive is likely to have this effect. It fails to grasp how cryptos are distinct from fiat money in the first place. Investment companies that handle national currency, including commercial banks or other monetary network operators, are subject to current EU Laundering legislation.
