The Call Comes Amid EU Lawmakers Propose Banning Non-Custodial Wallets

Crypto regulations have become the main topic of discussion among both crypto enthusiasts and lawmakers since there is still a grey space, which needs to be addressed. One of the key aspects of policy creation, according to a Bank of Japan official, has to be creating a common regulatory framework for cryptocurrencies, especially when it comes to evading sanctions.

A senior official from the Bank of Japan (BOJ) voiced that G7 nations have to create such a regulatory framework as quickly as possible, as there is a real risk of being used for skirting economic sanctions in the light of the ongoing war conflict between Russia and Ukraine.

Furthermore, Kazushige Kamiyama, head of BOJ‘s payment systems department added that Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States have to consider the growing popularity of stablecoins and CBDCs, as those digital tools “create an individual global settlement system,” which could be a threat for traditional payment systems that are operating with fiat currencies like the U.S. dollar, euro or yen for settlement.

Kamiyama also noted that the result of the regulatory framework would influence the path Japan’s own central bank digital currency (CBDC) — the digital yuan, might take.

Meanwhile, Haruhiko Kuroda, governor of the BOJ, stated that a digital yuan project is in consideration, but would not happen anytime soon, since the BOJ plans to carefully consider the expected roles of central bank money in the lives of Japanese citizens.

“We consider it important to prepare thoroughly to respond to changes in circumstances in an appropriate manner, from the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems,” Kuroda added.

Interestingly, the call for a global crypto regulatory framework comes just several days after Japan’s central bank announced that it shifts toward phase two of testing the viability of a Japanese CBDC. However, if Japan decides to issue a CBDC project, it would come no sooner than 2026, according to Kuroda.

Regulatory havoc in the European Union

The topic of regulating cryptos made its way to the highest levels of European legislators, but the efforts of migrating cryptos from the grey economic area created some difficulties, like the controversial MiCA framework, which almost banned Proof-of-Work cryptocurrency projects from operating in the EU.

Now, a similar thing is about to happen, since European regulators are planning to put a ban on non-custodial wallets, citing KYC and AML concerns.

According to the proposal, crypto services providers have to collect personal details of individuals who transact over 1,000 euros worth of crypto, if they are using self-hosted wallets before the transfer is allowed.

The proposal sparked heated discussions among lawmakers and members of the crypto industry about whether or not non-custodial wallets should be bound by the know-your-customer (KYC) policies.

The crypto industry strikes back

Immediately after the proposal, the crypto community responded negatively, with Coinbase CEO Brian Armstrong calling the proposed legislation “anti-innovation, anti-privacy, and anti-law enforcement.”

“Moreover, any time you receive 1,000 euros or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity.” Armstrong tweeted.

Tether and Bitfinex CTO Paolo Ardoino also expressed his concerns, calling the new measures “a big step back for human rights.”

However, the proposal still has to meet the trialogue talks between representatives of the European Parliament, the European Council, and the European Commission, which is scheduled for mid-April before even getting into voting by the Parliament.

Cryptocurrency Regulations Crypto wallet wallet cryptocurrency news crypto news Regulations

Cookie Policy uses cookies to enhance your experience. By continuing without changing your settings, you agree to this use. To provide the best blockchain and crypto media on the web for free, we also request your permission for our partners and us to use cookies to personalize ads. To allow this, please click "OK". Need more info? Take a look at our Cookie Policy.

OK Cookie Policy