European Commission Eyes Transaction Limits on Digital Currencies
The European Commission, the executive branch of the EU, is weighing a limit on cash transactions in a move that may also affect digital currency payments.
According to an impact assessment published by the Commission, the aim of the proposal is to curtail payments in cash, which critics say promotes anonymity when transacting. Any restrictions, the roadmap states, “would be a mean to fight criminal activities entailing large payment transactions in cash by organised criminal networks” – with a similar impact on terrorist financing as well.
On the same foot, such efforts could be used to target digital currencies like bitcoin as well. The European Commission has already moved to extend anti-money laundering and know-your-customer rules to bitcoin exchanges in the economic bloc, bringing those firms under the EU’s Anti-Money Laundering Directive.
According to the impact assessment, restrictions on the amount of cash people can pay with could be applied to digital currencies, which notes:
“In view of the development of cryptocurrencies and the existence of other means of payments ensuring anonymity, an option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.).”
That said, actually implementing the strategy may not be so easy – it might even prove to be counterproductive, the assessment goes on to state.
“On the other hand, restrictions on cash payments could promote the development of alternative payments technologies compatible with the non-anonymity objective pursued,” it reads.
As finance blog Wolf Street notes, the proposal may run into resistance from EU citizens as well, citing a backlash early last year against a bid to cap cash transactions in Germany, the bloc’s largest economy.
While no specific limits are cited in the assessment, it does highlight that different EU countries have adopted different approaches and that any final amount would need to take those strategies into consideration.
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