The European Union (EU) is pushing ahead with a proposed law that will focus on targeting Bitcoin (BTC) and other cryptocurrency transfers across member states and beyond.
This is the latest move designed by the EU in a bid to bring the sector under control and add more transparency and accountability.
The European Parliament voted strongly in favor of the measure with 93 people supporting it and another 14 objecting to it.
Coinbase, a prominent cryptocurrency exchange firm, has objected to the measure, cautioning that it would enable “surveillance regime” that would lead to diminishing innovation.
However, the $2.1 trillion sector is filled with transactions that take place under a patchy regulatory framework.
That is why the European Commission wants to introduce clear-cut rules that will enable it to better safeguard consumers while encouraging innovation. Part of this is bringing the freewheeling sector under control by introducing more accountability.
Another concern is that criminals, and even sanctioned countries such as Russia, may try to use cryptocurrencies to avoid detection.
The proposed measure by the European Parliament is the first attempt to bring some clarity into the sector. The rules though will not violate privacy as some fear.
Originally, the measure was supposed to only concern deposits that exceed $1,110 or the equivalent of 1,000 euro.
However, the voting that took place last week indicated that all transactions will be monitored. This is done to reflect another move by the global Financial Action Task Force that is attempting to create clear-cut standards for combatting money laundering.
Coinbase chief legal officer Paul Grewal warned that traditional cash is still the best way to hide money and what most criminals turned to.
While he has a point, this does not mean that crypto is not used by criminals – more transparency in the sector would do the exact opposite of stifling innovation – it would define clear rules for companies to thrive in.