In a new report, the Open Dialogue Foundation (ODF) provides an overview and analysis of upcoming regulatory proposals on non-custodial Bitcoin and crypto wallets in the European Union (EU).
Some of the proposals, many of which are based on FATF recommendations, will negatively affect users’ ability to conduct private cryptocurrency transactions.
EU and FATF 2025: the new rules for your Bitcoin wallet?
What is the best Christmas gift from human rights, privacy and Bitcoin advocates?@ODFoundation gives you a complete answer on what you should know while using it #Bitcoin P2P wallet, payment tools for privacy and… pic.twitter.com/YZIlCZjSiR
— Ljudmyla Kozlovska 🇪🇺🇺🇦 (@Ljudmyla Kozlovska) December 24, 2024
Highlights from the report include:
- According to guidelines from the European Banking Authority (EBA), the current cryptocurrency regulatory framework in the EU allows actions that carry significant risks, including immediate withdrawals to non-custodial wallets and the use of anonymity-enhancing tools such as mixer.
- Future Markets in Crypto-Assets (MiCA) regulation may influence Crypto-Asset Service Providers (CASPs) to adopt more stringent AML/KYC practices.
- EU regulation could prohibit CASPs from facilitating anonymous transactions, which would reduce privacy for crypto-asset users and increase operational costs for CASPs.
- The obligations that may be imposed on CASPs will conflict with the increased proliferation of open source technologies such as Lightning Network, Fedimint and ecash, which allow users to transact in a private and censorship-resistant manner.
Am I sharing all this because I’m trying to ruin your holiday season? No, ladies and gentlemen.
I share this because we should be grateful for the work the Open Dialogue Foundation does in shedding light on what is happening in the regulatory landscape in the EU (especially regarding non-custodial crypto wallets) and in developing relationships with elected officials in the EU to educate them about the importance of Bitcoin and other technologies for freedom.
So if you’re looking to make a tax-deductible donation to a nonprofit before the end of the year, consider donating to ODF.
And if you’re thinking “Well, I don’t live in the EU, so this doesn’t concern me” or “I live in the EU, but I’ll just move if bad regulation passes”, I would ask you to consider the following two points (the first of which I took directly from this recent ODF report):
- The European Union plays a central role in setting global financial regulatory standards (which means crypto transaction privacy advocates around the world have something at stake here).
- The organization making many of the proposals for the new regulatory framework in the EU – the FATF – is international and will use any victories it achieves in the EU to influence regulation in other jurisdictions.
But, again, don’t be afraid; be grateful.
Donate to ODF to support its efforts or do what you can to amplify the organization’s messages.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.