The European Union has announced a ban on the use of anonymous cryptocurrencies and wallets as part of a new anti-money laundering regulation effective in 2027.
Ban on Privacy Tokens in the EU
Under the newly adopted Anti-Money Laundering Regulation (AMLR), it has been decided to eliminate tokens that provide user anonymity, such as Monero (XMR), Zcash (ZEC), and Dash. The ban extends to any wallet that conceals ownership, compelling crypto service providers and financial institutions to cease support for these assets.
Establishment of a New Regulatory Authority
To ensure adherence to the new rules, a new body called the Anti-Money Laundering Authority (AMLA) will be established to commence operations in July 2027. It will oversee at least 40 crypto service providers across several EU countries and ensure compliance with new regulations.
Crypto Market Reaction
Following the announcement of the ban, the prices of privacy tokens have dropped significantly, with Monero falling by 7.2% and Zcash by 5.8%. Some market participants plan to adjust their services or consider relocating to countries with more flexible regulations. However, critics argue that such a ban could negatively impact those who need financial privacy.
The introduction of the ban on anonymous cryptocurrencies and the establishment of a new regulatory authority are expected to enhance transparency and security in financial transactions in the EU, although concerns about financial privacy rights have been raised.
