This decision is part of a series of new laws targeting money laundering.
On March 19th, the European Parliament approved new anti-money laundering laws, with the majority of key committees in favor, which restrict anonymous payments. This includes both those made with euros (EUR) in cash and digital payments with bitcoin (BTC) and cryptocurrencies.
Specifically, it stipulates that anonymous cash payments exceeding 3,000 euros in commercial transactions and 10,000 euros in business transactions will be illegal. Additionally, it will prohibit payments in cryptocurrencies, regardless of the amount, made with anonymous wallets.
This marks a war on cash and a gradual erosion of our financial freedom!" exclaimed Member of Parliament Patrick Breyer. He was one of the two European Parliament commissioners who voted against the laws.
"Banning anonymous payments would, at best, have minimal effects on crime, but would deprive innocent citizens of their financial freedom," he emphasized in a statement on his website. "We have the right to pay and donate online without our personal transactions being logged (...). The medicines or adult toys I purchase are no one else's business," he added.
"When every financial transaction is captured and stored indefinitely, it creates a honey pot for malicious hackers and law enforcement alike, casting a chilling shadow of government surveillance over every purchase or donation."
Patrick Breyer, member of the Pirate Party in the European Parliament and advocate for digital freedom.
Regulating Payments Between Anonymous Bitcoin Wallets is Proving Impossible
Breyer pointed out that for thousands of years, societies worldwide have relied on cash to safeguard financial privacy. In fact, the attempt to protect identity in holdings and capital movements gave rise fifteen years ago to bitcoin, the first digital currency that can be self-custodied in a wallet impossible to confiscate.
"If the EU believes it can regulate virtual currencies on a regional level, it has not grasped the global nature of the Internet," Breyer emphasized. To clarify, he explained that the new rules "would be easy to circumvent" since bitcoin and cryptocurrencies can be sent between two self-custodied anonymous wallets.
"Virtual assets can be transferred directly from one person to another without using intermediaries, making them impossible to regulate," he explained. That's why, he suggested, the laws are nonsensical.
Furthermore, he indicated that in cases where virtual assets have been detected in criminal activities in the past, prosecution has been possible without these regulations. This has been achieved, he noted, through the investigation of on-chain movements that led to identifying individuals.