Europe Lays Out Roadmap to Restrict Payments in Cash and Cryptocurrencies

Cash and cryptocurrencies have been the target of the European Commission’s anti-money laundering efforts. Recently, the Commission published a roadmap of its proposal for the ‘restrictions on payments in cash’ initiative, extending them to cryptocurrencies like bitcoin.

Also read: Europe Committed to Tightening Digital Currency Rules by End of 2017 

The Roadmap

The roadmap or ‘Inception Impact Assessment’ aims to inform stakeholders such as law enforcement, tax authorities, central banks and everyone who would be impacted by the initiative and give them the opportunity to provide feedback. It explains the initiative and explores options to restrict cash payments.

Citing cash transactions’ feature of anonymity, the roadmap Europe's Roadmap to Restrict Payments in Cash and Cryptocurrenciesstates that “such anonymity can also be misused for money laundering and terrorist financing purposes”, adding that cash payment restrictions would potentially be a means to fight criminal activities using large cash transactions.

Some options considered by the Commission include forcing payments through channels that are not anonymous such as bank transfers and checks using EU legislation.

On the other hand, a competent authority could be made responsible for ensuring transparency. Alternatively, the declaration can also be made independently by all parties to the payments. The Commission also considered the level of restriction threshold and whether there should be a single threshold or variable thresholds based on country’s purchasing powers.

Extending the Restrictions to Cryptocurrencies

Among several approaches discussed in the roadmap is an option that takes into account new technologies such as cryptocurrencies.

The problem with cryptocurrency payments is different from that of cash. Cryptocurrencies are not regulated at the EU level. They are considered anonymous because their transactions are recorded but “there is no reporting mechanism equivalent to that found in the mainstream banking system to identify suspicious activity”, the Commission explained.

The roadmap suggests:

An option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.). On the other hand, restrictions on cash payments could promote the development of alternative payments technologies compatible with the non-anonymity objective pursued.

If the cash restrictions were to be extended to cryptocurrencies, they will supplement the existing proposed measures to reduce cryptocurrency anonymity as outlined in the Anti-Money Laundering Directive (AMLD) amendments proposed last July.

More EU Controls on Cryptocurrencies

The Commission has been actively working on ways to reduce cryptocurrency anonymity since it published the ‘Action Plan for fighting against terrorist financing’ last February. The Plan builds on the EU’s Fourth AMLD, due to be implemented this year. It states that “there is a risk that virtual currency Europe's Roadmap to Restrict Payments in Cash and Cryptocurrenciestransfers may be used by terrorist organisations to conceal transfers”, prompting the Commission to extend “the scope of the AMLD to include virtual currency exchange platforms.”

In July last year, the Commission proposed defining “all gatekeepers that control access to virtual currencies, in particular, exchange platforms and wallet providers” as entities that must monitor suspicious transactions with cryptocurrencies.

Earlier this year, the Juncker administration confirmed that the fight against money laundering and terrorist financing, which includes cryptocurrencies, is its priority.

Do you think the EU will successfully restrict cash and cryptocurrency payments? Let us know in the comments section below.

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  • Paul Bond

    I don’t personally object to the above, but it leads a question:

    Will the government supply relevant information in a transparent way on a blockchain so that ‘we the people’ can see what taxi fares, restaurants, cars, airplane fees they spend our debt currency on? Me thinks…no they won’t.

  • Sveca Ceca

    Yes, we are all blind, def and mute.

  • Sure Thing

    The government doesnt work for the people but against them. They want total control of the population. If you do not comply you are a criminal or terrorist. They want to be able to press a button and erase your rights, information & wealth

    • Andrew K

      Exactly. People think just because there isn’t tanks on the streets that there’s no war going on anymore in the “developed world”. It’s a more subtle war.

    • antesithe

      Many of us are now starting to see this reality and these old anachronistic structures will have to either reform themselves or give way for new institutions that are truly democratic and constructive. All these attacks on cryptocurrencies and even cash are targeting us citizens and it is very obvious.

  • Sadhaka Padma

    In all previous terorist acts were used dolars, pounds, euros…ban them first.

  • why bother

    Funny! There are apps for smartphones that can easily send crypto to any address with no bank involvement. They would have to confiscate phones

    • I think they will go after the centralized exchanges first, along with the crypto wallets in the app stores next.

      • antesithe

        Yes I agree. We can see the first steps in this direction with the IRS vs Coinbase case in California, bizarre. They are pushing towards censorship and/or complete surveillance on so many fronts that it is reminiscent of old dystopian fiction. We will just have to counter with ever more open and decentralized systems like virtual exchange networks and wallets.

  • Orly

    Will be like the war on drugs but less successful.

  • George Coffie

    Funny Eu they still want to control peoples funds.we want to be own bank thanks.

  • antesithe

    The European Commission is going too far and will soon feel the anger of the people. We don’t want your nonsense obstructionist tyranny anymore. Brussels today represents a bureaucracy that has become detached from ordinary people who are starting to see the same situation as in Washington D.C where lobbyists are running the whole agenda. Europe needs a reboot. How about replacing this fake democracy with the real thing and let people decide for once?

  • antesithe

    The reason your ideas go unheard in the halls of power is because they don’t think like we do. Their words of freedom, liberty, democracy are empty words and in many cases cloaks covering the real reason why they are there – power and control. Governments and power institutions attract the wrong type of people and it is evident throughout history. I see all politicians as little more than professional liars.

  • Harry Wood

    Thanks Kevin. Great insights. The EU is seeking totalitarian control AND is completely out of touch with the way the world is going. Looks like the 52% who voted for Brexit were absolutely right. The UK is leading the way out of a burning building. It won’t be long before the other 27 EU countries realise how lucky the UK is to be heading for the exit door. Mind you, we still have to get out. We’re not out yet.