The European Union is introducing new laws that will ban transactions over €10,000 ($10,557) in a major push toward an eventual cashless society.
However, the laws also seek to impose stricter controls on cryptocurrency and will track crypto payments above 1,000 euros ($1,055).
EU leaders ostensibly claim that the new restrictions are aimed at fighting money laundering.
While announcing the new set of new directives, the EU boasts that the move will make it more difficult to use cash and crypto for criminal purposes.
However, the new rules will also make it illegal for people to use cash for legal purchases, such as buying a car.
On November 6, the bloc approved a new limit for cash payments that will apply to all of the countries that are part of the union.
The new rule does not include any provision for the cap to be raised, but it does allow countries to reduce the limit even more.
Currently, Spain has one of the lowest limits in this regard, allowing citizens to only pay up to €1,000 ($1,055) with cash.
Although, the European Central Bank (ECB) did express its disagreement with this back in 2018 when the institution qualified the measure as “disproportionate” as it could limit the usage of cash as an effective legal tender.
It’s not just cash payments that will be affected by this new round of measures.
Other sectors including jewelry and goldsmithing will also face heightened control from the organization.
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 EU 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.
As Stanjur stated, cryptocurrencies will also be included as part of this set of measures.
The European Union agreed that crypto transactions moving over €1,000 ($1,055) in value will face due diligence inquiries by the virtual asset service providers (VASPs) facilitating them.
Also, the European Union will subject VASPs to the same level of anti-money laundering and terrorism financing scrutiny that other financial institutions already face.
These exchanges and custody providers will have to introduce risk mitigation elements when dealing with self-hosted wallets, and other specific measures directed to control cross-border payments using cryptocurrency.
