EU considers registering Bitcoin users

EU considers registering Bitcoin users

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Pursuant to earlier reports on the plans of the European Commission (EC) to impose strict regulation on cryptocurrencies as part of its Action Plan for strengthening the fight against terrorist financing”, it appears that the Commission is considering the introduction of a register of Bitcoin users.

This would be another step towards tackling the anonymity of cryptocurrencies, which are often used for money laundering, funding of terrorism and other criminal activities and buying of drugs, weapons, child pornography, for example, on the so-called Dark net.

The new EC proposals, according to media reports, includes a central database for Bitcoin and other cryptocurrency users’ identities and wallet addresses, which would be accessible to government financial intelligence units. So far there appear to be two main options concerning the users: mandatory or voluntary registration.

“The report shall be accompanied, if necessary, by appropriate proposals, including, where appropriate, with respect to virtual currencies, empowerments to set up and maintain a central database registering users’ identities and wallet addresses accessible to FIUs, as well as self-declaration forms for the use of virtual currency users.” (p 38)

The proposal also discusses other options for tackling the anonymity associated with cryptocurrencies like regulation of the cryptocurrency exchanges and the custodial providers of wallets.

The former step has already been implemented by Japan, which introduced regulation for the cryptocurrency exchanges.

Similarly, earlier this week California overhauled a bill, similar to New York’s “BitLicense”, which would require all cryptocurrency businesses to pay a $5000 license fee, provide extensive information on themselves and their business and be subject to strict capital requirements and other regulations.

At the same time Russia, which generally prefers forbidding things it does not understand and/or like, is considering banning cryptocurrencies altogether.

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