Jacek Czarnecki currently holds a Master’s degree in Law and Finance from Oxford University, specialising in digital currencies, decentralised account management and financial regulation. He has also co-authored the first publication in Poland on digital currencies.

In this Bitcoin news, Czarnecki discusses an aspect of the European Commission’s recent proposal

This Bitcoin news deals with the regulation of digital currencies, with far-reaching consequences, as he says. Recently, the European Commission announced Bitcoin news under the EU anti-money laundering and terrorist financing regulations. These concern the trading or exchange of digital currencies, and possibly wallet providers.

This action is part of a broader European Commission action to combat terrorist financing.

While these intentions are not surprising, there is a hardly published and lesser known proposal by the European Commission. This has the potential to revolutionise government regulation of digital currencies in the EU.

The obsolete idea of Bitcoin formula

The intention to take Bitcoin formula into account when regulating money laundering and terrorist financing has already been expressed several times by the EU institutions – e.g. by the European Banking Authority in 2014 and after the terrorist attacks in Paris in February and November 2015.

It seems that the recent tragic events have strengthened the regulatory intent of the European Commission.

It is interesting that the intended changes (details will be published in the second quarter of 2016) are likely to be made to the 4th Anti-Money Laundering Directive. Even if the directives are to be adopted soon, EU member states will have enough time to implement the changes.

These developments are not unforeseen, as many other authorities have already taken steps to regulate (USA and Canada) or intend to do so (UK and Australia).

Measures to this end have also been recommended by the Financial Action Task Force (FATF), an intergovernmental organisation helping to enforce international standards in the fight against money laundering and terrorist financing.