Digital Euro May Get Easier AML Rules Than Bitcoin, EU Commissioner Says

Mairead McGuinness promised a role for banks in distributing the CBDC, as a consultation presages legislation earlier next year.

AccessTimeIconApr 5, 2022 at 3:56 p.m. UTC
Updated May 11, 2023 at 4:28 p.m. UTC
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The EU’s potential digital euro will face money laundering checks – but not necessarily ones as strict as those currently planned for regular cryptocurrencies like bitcoin (BTC), the European Commission’s Mairead McGuinness told CoinDesk Tuesday.

In an exclusive interview, McGuinness, the Commission’s most senior financial services official, promised a role for private intermediaries like banks should a European central bank digital currency (CBDC) be implemented, and said there would be new laws ahead of any decision to issue.

The European Central Bank (ECB) has said it is exploring a digital form of state-backed currency to complement banknotes and coins as people’s lives and spending habits go increasingly online. The bank is currently working through a series of policy questions before deciding whether to press ahead.

In a recent, controversial vote, lawmakers at the European Parliament favored tough anti-money laundering (AML) rules for bitcoin payments, requiring customers to be identified for even the smallest transactions. But privacy concerns could mean a different regime applies to the EU’s own digital currency, McGuinness said.

“A digital euro should comply with AML requirements but this is different to the current discussion on cryptoassets,” she said in a written interview. “We will be assessing whether a higher level of privacy should be made available, in particular, for low-value transactions, depending on the risk characteristics of the digital euro.”

While the ECB would issue the digital euro, payment service providers – typically the commercial banks that issue credit cards – will have a “key role” in finding and identifying customers, distributing the currency and offering extra services on top, she said.

“Intermediaries would have to ensure the onboarding of users and perform AML checks,” she said. “The digital euro is expected to be factored in to different payment solutions that payment services providers offer.”

A presentation given by ECB officials to finance ministers yesterday suggests in practice there could be multiple different kinds of wallets available to hold a digital euro with fewer checks associated with lower-risk payments. Smaller payments could potentially be fully offline and private, the presentation said, analogous to how cash is used today.

But the ECB can’t make any formal decision to issue until new laws are in place, McGuinness said.

“The Commission plans to adopt a proposal for a regulation in Q1 2023,” she said.

A public consultation to prepare the ground for that law was published by McGuinness earlier Tuesday.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

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