EU Bitcoin user Database: Big Brother is Watching
One of the main reasons that users favour Bitcoin is because they have complete freedom using it and can keep safely under the radar.
This is something that has not gone unnoticed by the powers that be.
According to an article in the telegraph, the EU is considering the launch of a large scale database that will be used to crack down on "criminals".
Justified or Government Overreach?
While there may be some rationale for monitoring the use of Bitcoin for criminal activity, one has to wonder whether this could result in regulatory overreach.
According to the report, the laws being considered would mean that cryptocurrency exchanges would have to have the same strict anti-money laundering laws as well as customer identity confirmations.
The article noted that the fourth Anti Money Laundering directive claimed that this information would allow the authorities to have a
The report shall be accompanied, if necessary, by appropriate proposals, including, where appropriate, with respect to virtual currencies, empowerments to set-up and maintain a central database registering users’ identities and wallet addresses
The intention of having this database is that it can be accessed by agencies that monitor criminal activity such as the National Crime Agency (NCA) and the asset recovery authorities.
If this were to be implemented into any sort of laws, it would only come in 2019 which is when the new money laundering regulations are to be discussed.
Invasion of Privacy?
Although these databases may make it easier for the authorities to identify those that have used Bitcoin for nefarious purposes, there are many that think they infringe on personal rights.
The main purpose of Bitcoin was in order to make ones transactions private and to give personal liberty back to the user. Hence, given that transactions may be tracked, users could consider tumbling services such as ZeroLink.
Some Welcome new Laws
Although this is something that may make some Bitcoin users uneasy, there are others who think that the changes may add a sense of legitimacy to the cryptocurrency markets.
Finally, exchanges will have an excuse to conduct thorough KYC on their clients. It also means that the negative "perceptions" that exist with Bitcoin are likely to be changed.
Yet, one man's meat is another man's poison. What may sound good from a mass adoption perspective may threaten privacy for others.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.