European Banking Authority Aims for Protocol Interoperability and Enhanced Wallet Security in Crypto Providers
The European Union’s banking watchdog, the European Banking Authority (EBA), is poised to revise the existing anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations for crypto providers. This move is aimed at strengthening the financial system’s integrity against illicit activities.
Consultation on Updated AML/CFT Rules
Released on Nov. 24, the EBA’s consultation paper highlights the inadequacy of current European regulations to ensure AML/CFT compliance among crypto-asset service providers (CASPs). Stakeholders have until Feb. 26, 2024, to respond to these proposed guidelines.
Merging PSP and CASP Criteria
A significant aspect of the EBA’s proposal is the integration of AML/CFT standards for payment service providers (PSPs) and CASPs. This includes a push for CASPs to enhance the interoperability of their protocols, facilitating seamless information transmission.
Enhanced Requirements for Self-Hosted Wallets
The new rules would require CASPs to maintain detailed information on self-hosted wallet addresses, especially for transactions exceeding 1000 euros. The specifics of this threshold – whether it’s a monthly, daily, or one-time limit – are yet to be clarified.
Timeline for Implementation
Following the consultation period, the EBA aims to enforce these guidelines starting Dec. 30, 2024. This follows their previous initiatives, such as assessing the management of asset-referenced token issuers and encouraging stablecoin issuers to adhere to voluntary principles regarding risk management and consumer protection.
