New directives from the European Union aim to restrict the use of cash and alternative currencies such as crypto for criminal purposes. As of Nov. 6, the bloc agreed to limit cash payments to €10,000 ($10,557) and to exert stronger supervision on crypto transactions over 1,000 euros ($1,055).
The Spanish government presently has one of the lowest cash payment limits in the world, with citizens only being able to pay up to €1,000 via cash. The European Central Bank (ECB) has described this policy as “disproportionate” and has expressed its disapproval of it.
Crypto transactions in the European Union with a value exceeding €1,000 ($1,055) will be subject to due diligence checks by virtual asset service providers (VASPs) that facilitate them as a result of the European Union agreement. When dealing with self-hosted wallets, exchanges and custody providers will have to implement risk mitigation measures, as well as other measures, in order to ensure that cross-border cryptocurrency payments are controlled.
In particular, these measures should include monitoring of the origin and destination of the transactions, as well as customer identification processes for suspicious transactions. Furthermore, VASPs will be required to monitor and report suspicious transactions to the relevant national authorities.
