European Union to put a 10,000-Euro Limit on cash payments; Transactions over €1,000 in crypto will be scrutinized
The states of the European Union have convened to establish a new limit on cash purchases and to strengthen the controls on cryptocurrency transactions.
In order to make it more challenging for criminals to use cash and other alternative currencies like cryptocurrency, the nations of the European Union have announced a set of new directives. The bloc approved a new cap on cash payments on November 6 that will allow up to €10,000 ($10,557) in each of the union’s member nations. However, nations will have the option to lower the cap even further.
With its citizens only being permitted to pay up to €1,000 ($1,055) in cash, Spain currently has one of the lowest restrictions in this area. The European Central Bank (ECB) disagreed with this, however, and did so back in 2018 when it deemed the measure “disproportionate” because it might restrict the use of cash as a reliable form of legal tender.
This latest set of restrictions will apply to more than just cash payments. The organization will also exert greater control over other industries, such as jewelry and goldsmithing.
Zbynek Stanjur, minister of finance of the Czech Republic, 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 introduce a new country system classification that will reflect the level of compliance of each one with Financial Action Task Force (FATF) recommendations, including gray and black lists.
Cryptocurrencies will also be incorporated into this group of measures, as Stanjur stated. The Virtual Asset Service Providers (VASPs) that are facilitating cryptocurrency transactions over €1,000 ($1,055) will be required to conduct due diligence checks.
Additionally, VASPs will be subject to the same level of anti-money laundering and counterterrorism financing scrutiny as other financial institutions under the European Union. In order to manage cross-border cryptocurrency payments, these exchanges and custody providers will need to implement risk mitigation strategies when dealing with self-hosted wallets.