On the 23 January 2017, the EU Commission published a “Proposal for an EU initiative on restrictions on payments in cash”. This came in the form of an impact assessment into exploring the relevance of setting an upper limit on cash transactions. The aim of the proposal is to combat terrorist financing by extending the scope of Regulation (EC) No 1889/2005 with regards to the controls of cash both entering and exiting the EU.
In relation to cash payments, the Third AML Directive put in place know-your-customer (KYC) requirements for specific parties receiving transactions of €15,000 or more. This provision is now being supplanted by the Fourth AML Directive due to be fully implemented in June 2017 which reduces this amount to €10,000 or more.
The Proposal set out by the EU Commission also included virtual currencies such as Bitcoin as being part of the scope for setting a transaction limit. The main reason for this is due to the fact that one of the main issues with virtual currencies is their general anonymity. In fact, the Proposal stated that:
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.)
It would appear that in light of this suggestion, it is likely that KYC requirements will be imposed on parties receiving the equivalent of €10,000 or more in virtual currencies. As soon as more information becomes available this will be reflected on the Bitlegal World Tracker