The European Commission on Tuesday proposed a law to apply what is known as the “Travel Rule” on cryptocurrency transactions. According to the Commission, the move is geared towards making crypto transactions more transparent.
The proposed law will require companies that transfer digital assets to collect the details of the sender and the recipient in any transaction, to help authorities track dirty money. And it is acting on the recommendation of the Financial Action Task Force (FATF), an inter-governmental regulator.
Providing anonymous crypto wallets will also be banned, just as anonymous bank accounts have already been banned under EU Anti-Money Laundering rules. According to a statement released by the Commission:
The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU's anti-money laundering and countering terrorism financing (AML/CFT) rules….These proposals have been designed to find the right balance between addressing these threats and complying with international standards while not creating excessive regulatory burden on the industry.
The Commission expressed its confidence that the proposal would be beneficial to all parties involved and will in no way hinder the European cryptocurrency industry. However, in the meantime, nothing has been made official. The law is pending approval from EU states and the European Parliament. It could take as much as two years for the proposals to become law.