The European Union has announced a set of new directives to make it more difficult to use cash and other alternative currencies such as cryptocurrency for criminal purposes. On November 6, the bloc approved a new cash payment limit of up to €10,000 ($10,557) in all of the union’s member countries. Countries may, however, reduce the limit even further.
Spain currently has one of the lowest limits in this regard, allowing citizens to pay cash only up to €1,000 ($1,055). However, the European Central Bank (ECB) disagreed with this in 2018, labeling the measure “disproportionate” because it could limit the use of cash as an alternative currency.
This new round of measures will have an impact on more than just cash payments. The organisation will also tighten its grip on other industries, such as jewellery and goldsmithing.
Czech Republic Finance Minister Zbynek Stanjur stated:
“Cash payments of more than 10,000 euros will be impossible. Remaining anonymous when buying or selling crypto assets will be much more difficult. Hiding behind several layers of corporate ownership will no longer work. It will be even more difficult to launder dirty money with jewelry or goldsmithing.”
The bloc will also implement a new country classification system that will reflect each country’s level of compliance with Financial Action Task Force (FATF) recommendations, including grey and black lists.
Cryptocurrencies, as Stanjur stated, will be included in this set of measures. The European Union agreed that crypto transactions worth more than €1,000 ($1,055) will be subject to due diligence checks by the virtual asset service providers (VASPs) who facilitate them.
In addition, the European Union will subject VASPs to the same anti-money laundering and terrorism financing scrutiny as other financial institutions. These exchanges and custody providers will have to implement risk mitigation elements when dealing with self-hosted wallets, as well as other specific measures aimed at controlling cross-border cryptocurrency payments.