EU to limit cash payments to €10,000; cryptocurrency transactions over €1,000 to be scrutinized

The European Union will set a new limit on cash purchases and tighten controls on crypto-currency transactions. On November 6, the bloc agreed to set a €10,000 limit on cash payments and to exercise stricter oversight over crypto-currency transactions over €1,000.

The European Union will limit the use of cash, ostensibly to combat money laundering.

European Union countries have announced a series of new guidelines aimed at making it harder to use cash and other alternative currencies like crypto-currencies for criminal purposes. On Nov. 6, the bloc approved a new limit on cash payments that will allow up to €10,000 in all countries that are part of the union. However, countries will be allowed to reduce this limit further.

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Currently, Spain has one of the lowest limits in this regard, allowing citizens to pay up to €1,000 in cash. However, the European Central Bank (ECB) disagreed with this in 2018, when the institution called the measure “disproportionate”, as it could limit the use of cash as an effective legal tender.

Cash payments are not the only ones affected by this new round of measures. Other sectors, including jewelry and goldsmithing, will also be subject to increased scrutiny by the agency.

Zbynek Stanjur, Minister of Finance of the Czech Republic, said:

Cash payments of more than €10,000 will be impossible. Remaining anonymous when buying or selling crypto-assets will be much more difficult. Hiding behind multiple layers of corporate ownership will no longer work. It will be even more difficult to launder dirty money with jewelry or silverware.

The bloc will also introduce a new country classification system that will reflect each country’s level of compliance with Financial Action Task Force (FATF) recommendations, including gray and black lists.

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Crypto-currency transactions also included

As Zbynek Stanjur reported, crypto-currencies will also be included in this package. The EU has agreed that crypto-currency transactions worth more than €1,000 will be subject to due diligence investigations by the virtual asset service providers (VASPs) that facilitate them.

In addition, the European Union will subject VASPs to the same level of anti-money laundering and anti-terrorist financing controls as other financial institutions. These exchanges and custody providers will have to introduce risk mitigation elements when dealing with self-hosted wallets, as well as other specific measures to control cross-border payments using crypto-currencies.

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