The European Commission is drafting a new bill that would transform anonymous bitcoins into a digital currency with a name. It essentially proposes the creation of a database that will contain information about users of the virtual currency. This database will record the user's real identity, along with all the wallet addresses that correspond to them.
This is the first proposal part of a bill that the EU is preparing after the terrorist attacks in Paris in November 2015. The proposal was officially announced in February 2016 and is set to be adopted in July 2016.
The bill is a reform of the Anti-Money Laundering Directive (AMLD), includes the term “virtual currency”, and was approved by the EU President’s committee.
In addition to recognizing cryptocurrencies as another form of money, the bill also includes certain regulations that provide financial information units and the tools needed to monitor digital currencies.
So to combat money laundering through digital currencies, EU officials plan to create a database that will link Bitcoins and other cryptocurrency addresses to the real addresses of the owners, effectively putting an end to the anonymity of these payments.
The bill's proposals would give all member states the power to create databases and then manage them. However, users would also be able to register themselves, as a sign of good faith.
The AMLD bill states:
“This report shall be accompanied, where appropriate, by appropriate proposals, including, where applicable in relation to virtual currency, authorisations to set up and maintain a central database of user identities and wallet addresses, as well as self-certifications for the use thereof by owners of virtual currencies.”
The EU is interested in regulating Bitcoins and other similar currencies, to make it harder for terrorists and criminal groups to use the currency to hide their activities.
Of course, we should also mention the possibility of taxing digital currency, something that is not mentioned in the bill, but it is not difficult to imagine..
The final vote by the European Parliament is expected to take place later this year.
