As an important step forward, the European Union (EU) has put more robust measures into action to improve financial transactions’ standards of integrity, which last, but not least, contributes to money laundering prevention.
The just-received order will affect crypto services that provide anonymity to its users. A clear example is Defi as every transaction must reflect the name of the parties in it.
Enhancing Transparency in Cryptocurrency Transactions
This regulation abolishes the privacy status of certain crypto transactions, making them more transparent to some financial activities to minimize illicit activities.
Gaining the approval of the EU Parliament’s top committee on the 19th of March; the law requires parents to be able to trace the payment done with cryptocurrency back to a concrete identity.
Tightened Controls on Cash Exchanges
The EU has not only made stricter regulations on cryptocurrencies but also tightened controls on cash exchanges.
Cash transactions over €10,000 are now illegal, and private cash transfers will not exceed €3,000. To fight the concealment of funds, measures have been put in place to keep tabs on significant monetary transactions.
While a majority choose the positive side of the EU’s boldness but the negativity is also no less. Certain MEPs are concerned about the effects on individual freedoms and privacy, potentially on the personal financial side.
They say that the “tight” regulations could become a barrier to economic activities and disrupt financial independence.
Critics hold the view that although the bans serve the purpose of curbing financial crimes, the bans themselves may not be the most effective choice.
EU Broader Strategy
Nevertheless, the EU’s directive is just one of many steps within a broader strategy. Latest sanction-related actions by the European Parliament included increasing inventions to the EU sanctions in response to worsening situation in the Russia-Ukraine tension zone. Such provisions incorporated include features for stopping the utilization of cryptocurrencies to bypass financial penalties.
The EU’s proactive approach here signifies its commitment and systematic nature in combating financial crimes and bringing transparency of financial transactions.
Besides that, they raise issues about the delicate balance between security and privacy but at the same time reflect the general trend of governments taking action in response to the emerging challenges.
