The EU is Now Targeting “Unpermissioned” Blockchains

The EU is Now Targeting “Unpermissioned” Blockchains

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The EU has recently been very active in attempting to regulate digital currencies, including bitcoin. Last week, Bitcoin.com reported on the European Parliament’s proposal to amend the EU’s fourth Anti-Money Laundering Directive (AMLD), tackling digital currency anonymity. Now, a different proposal submitted by Parliament members is targeting specific areas of digital currency applicable to the EU fintech framework, including “unpermissioned” blockchains.

Also read: Digital Currency Regulation Heats Up In The EU As Parliament Proposes Additional Rules 

New EU Proposal Considers Bitcoin Mixers, Energy Usage, and VATMany of the EU’s efforts to regulate digital currencies have been through amending the AMLD. Still in its early stage of the EU legislative process, this new proposal seeks to amend an existing EU fintech proposal called ‘Fintech: the influence of technology on the future of the financial sector (2016/2243(INI))’. In a recent draft report, members of the European Parliament urge the European Commission to consider several amendments directly concerning bitcoin and other digital currencies.

Investigating the Role of Bitcoin Mixers

In one amendment, Parliament members call on the European Commission to investigate the role of bitcoin mixers. Amendment 257, paragraph 16, reads:

[The Parliament] Is concerned by the increased use of unpermissioned blockchain applications, in particular Bitcoin, for criminal activities, tax evasion, tax avoidance and money laundering; calls on the Commission to investigate the role of bitcoin mixers in this process.

This proposed amendment follows a global conference on countering money laundering and digital currencies in January which more than 400 financial investigators attending, including the FATF, Interpol, Europol, CEPOL and the Basel Institute on Governance. During the event, participants were told that: “All countries are advised to take action against Digital Currencies Mixers/Tumblers”.

Energy Usage and VAT

Some amendments in the proposal revolve around Bitcoin mining’s “high energy” usage such as Amendments 159 and 252. One amendment reads:

[Parliament] Notes that some implementations of DLT technology such as the Bitcoin blockchain have extremely energy intensive computational requirements and that, therefore, research should be encouraged to find ways of mining and verification that are energy efficient, especially for large scale uses.

Some benefits of digital currencies and blockchains were also added to Amendments 160 through 162, including competition of currencies and using an altcoin for solar energy credits. New EU Proposal Considers Bitcoin Mixers, Energy Usage, and VATThe Parliament “stresses that the current emergence of currency competition between national currencies and private virtual currencies could benefit innovation and price stability”, one proposal reads.

Fintech and blockchain initiatives such as a solar coin as well as research to achieve “environmentally responsible energy use and behaviour” are also welcomed, according to Amendment 162, in order to “reduce the environmental cost of Bitcoin-mining and related activities”.

Another amendment concerning bitcoin is one where taxation of payments made with digital currencies was suggested. In October 2015, the EU Court of Justice ruled that bitcoin transactions are exempt from Value-Added Tax (VAT) “under the provision concerning transactions relating to ‘currency, bank notes and coins used as legal tender’”. A Parliament member added Amendment 160 which reads:

[The Parliament] Calls on the commission to amend the VAT Directive so as to include into that payments made by virtual currencies.

What do you think of this new EU proposal? Let us know in the comments section below.


Images courtesy of Shutterstock


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  • Brad W

    These folks are making a lot of noise for a group about to be disbanded.

  • Hey EU!

    The whole point of a blockchain is that WE DON’T NEED YOUR FUCKING PERMISSION!

  • Carl Jons

    All these parasites can all kiss my arse.

  • Paul Bond

    They’re well overstepping their remit. Makes me want to move to a free country like Liberland, or at least a private city.

    So China’s unused hydro power is a concern for the energy usage in the EU now?

    Without mining farms, but distributed hashing, I bet if we all used 1 USB ASIC the total power would be less than all the banks – (maybe single digit MegaWatts for the entire planet) office lighting and just their desktop computers (ignoring the much greater foot print they make a burden on the planet for – salaries, expenses, transport fuel…. population happiness – that last one is a biggie).

    Can we fix the asset ledger efficiently “Yes we can” Can we fix politicians? “No it’s fucked”.

    • JJ1984

      It would be also less if you:
      Equal the amount of energy required for an economy to support bank bailouts.

  • xzars1@reddit

    It’s fair to the rest of economy if btc users also contribute to taxes (I
    do). What I don’t like is a legislation proposal that puts btc and other
    cryptocurrencies in an inferior position when compared to cash users,
    be it in terms of taxes or in terms of ability to retain privacy.

    As long as I can pay with complete anonymity using my cash notes, I
    will not consent to self-declare my bitcoin addresses in the name of
    “fighting with terrorism and money laundering”. I’m not a criminal, but
    sorry, this legislation proposal does not seek to level the playing
    field.

    • MC Kuky

      The fiat money we use to buy Bitcoin is already what you get after you’ve paid your tax, so buying Bitcoin with it should not be taxed yet again, that would be double tax. These fuckers in governments of all of these corrupt nations and institutions need to go… and we need to get rid of their shit fast.

    • De Wilde Weldoener

      Taxation is legalized theft.
      Theft is never fair.

      If you like Bitcoin you might as well look into libertarian thinking and Austrian economics, you might like those too.

  • mike hagan

    Is the EU still a thing???

  • Black Dynamite!

    Fortunately, this group of globalist scum will be holding a tin cup in the street before the end of the decade, so their economic terrorism is heading for the same future as their dictatorship.
    BD

  • Erik

    And this is the kind of stuff, is why we need to have our act together, and move quickly of they will end us with their rules. We need the numbers, we need the users, we need to be able to make fist and strike at them each time they try to take more freedom from us.

    This is why I all for DASH and its Goverance system, proper voting and right now a half a million in funds to spend each month. Dash at bitcoin market cap would be a 10milion funds per month. That pretty strong fist to there enslavement of use via rules and regulation, and oh yeah be the only one that can make currency (out of thin air).

  • Andre

    “In October 2015, the EU Court of Justice ruled that bitcoin payments are exempt from Value-Added Tax (VAT).” — Bitcoin payments were not exempt from VAT. Purchases of Bitcoin were exempt from VAT. I can tell from personal experience (I live in the EU) that if I buy something and pay with BTC, I still have to pay VAT on my purchase.

    In the EU, currency exchange in general is exempt from VAT. The reason is that it is very difficult to separate the currency value from the added value of the service. Since the added value is typically very small for currency exchange services, the tax is waived. The Court simply acknowledged that Bitcoin is a currency, and hence, should be treated as such.

  • Sammi kao

    Any decentralized coins are better then paper fiat. FIAT = Forget I Am There.

  • Paul Bond

    Taxing the unit of exchange is just silly. That’s like adding VAT to a Euro or dollar. VAT happens when we purchase a big screen TV, car or something (last one in the chain takes it on the chin).

    We really need to shrink government *a lot*.

  • That why the EU should dissolve, the United Kingdom left this corrupt system! They want to control cryptocurrency for the purpose of terrorist, they want to control Fintech! Then what next?

  • De Wilde Weldoener

    Bitcoin does not “require” massive power to run, a single laptop could do all the necessary mining in the world right now.
    People are spending energy competing on mining of their own free will, because they can make a profit.
    Can’t wait for my EU overlords to be out of a job and having to find some way to make a living providing value in the free market like the rest of us, you know, a REAL job.

  • LucSr

    people don’t understand the reason of money as storage of value. for these people; if they are in the crypto community, they tend to think money in PoS way and invent high throughput scale crypto currency; if they are not in the crypto community, they invent fiat