The European Commission is responsible for proposing legislation, implementing decisions, upholding treaties and managing the day-to-day business of the European Union and the draft legislation has been offered as part of reforms to its existing Anti-Money Laundering Directive.
“Unfettered access to information is essential to ensure that flows of money can be properly traced and illicit networks and flows detected at an early stage,” reads the proposal.
If passed, the directive would require Bitcoin users in all of the bloc’s 28 member states including Germany, France, Italy and Finland to have their details registered although customers would be able to voluntarily provide their identity “as a sign of good faith”.
“The [European] Commission proposes to require member states to set up automated centralised mechanisms enabling to swiftly identify holders of bank and payment accounts,” reads the draft. “This will allow member states to choose between setting up a central registry containing the necessary data allowing for the identification of holders of bank and payment accounts and granting their own national…competent authorities a full and swift access to the information kept in the registry [or] other centralised mechanisms such as central data retrieval systems, which allow the same objective to be met.”
Although not recognizing cryto-currencies as actual money, the draft legislation, which could become law as early as January, would moreover oblige providers of digital currency wallets to abide by existing know-your-customer measures.
“Providers of exchange services between virtual currencies and fiat currencies (that is to say currencies declared to be legal tender) as well as custodian wallet providers for virtual currencies are under no obligation to identify suspicious activity,” reads the proposal. “Competent authorities should be able to monitor the use of virtual currencies. This would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.”