In a recent report, the Open Dialogue Foundation (ODF) presents an overview and examination of forthcoming regulatory proposals regarding non-custodial Bitcoin and cryptocurrency wallets within the European Union (E.U.).
Many of these proposals — numerous of which are based on FATF suggestions — could adversely affect users’ capacity to engage in private transactions with crypto assets.
EU & FATF 2025: Your Bitcoin Wallet's New Regulations?
What is the ideal Christmas gift from advocates of human rights, privacy, and Bitcoin?@ODFoundation offers you a thorough response on what you need to be aware of when using #Bitcoin p2p wallet, privacy payment options &… pic.twitter.com/YZIlCZjSiR
— Lyudmyla Kozlovska 🇪🇺🇺🇦 (@LyudaKozlovska) December 24, 2024
Key insights from the report are as follows:
- As per guidelines issued by the European Banking Authority (EBA), the existing regulatory framework surrounding crypto assets in the E.U. permits actions that carry considerable risks, including instant withdrawals to non-custodial wallets and the utilization of anonymity-enhancing tools such as mixers.
- Upcoming Markets in Crypto-Assets Regulation (MiCA) framework could prompt Crypto-Asset Service Providers (CASPs) to implement more rigorous AML/KYC protocols.
- E.U. regulation might restrict CASPs from facilitating anonymous dealings, thereby diminishing privacy for crypto-asset users and amplifying operational expenses for CASPs.
- The responsibilities that may be mandated on CASPs will clash with the growth of open-source technologies like the Lightning Network, Fedimint, and ecash, which enable users to transact in a private and censorship-resistant manner.
Am I sharing all this to ruin your festive season? No, dear friends.
I share this information to express gratitude for the efforts of the Open Dialogue Foundation in illuminating the regulatory developments within the E.U. (particularly concerning non-custodial crypto wallets) and for their work in fostering relationships with E.U. lawmakers to inform them about the significance of Bitcoin and other freedom technologies.
If you are contemplating making a tax-deductible contribution to a nonprofit before the year concludes, think about supporting the ODF.
And if you find yourself thinking, “Well, I don’t live in the E.U., so this doesn’t concern me” or “I reside in the E.U., but I’ll just relocate if unfavorable regulations are enacted,” I ask you to ponder the following two points, (the first of which I have taken directly from this recent ODF report):
- The European Union plays a pivotal role in shaping global financial regulatory standards (which implies that advocates for crypto transaction privacy worldwide have a stake in this matter).
- The institution proposing many of the new regulatory frameworks in the E.U. — the FATF — operates on an international scale, and it will use any successes it achieves in the E.U. to sway regulation in other areas.
But again, do not be alarmed; be appreciative.
Contribute to the ODF to bolster its initiatives, or do what you can to enhance the visibility of the organization’s messages.
This article represents a Take. The views expressed are solely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.