Ireland is taking proactive steps to develop new cryptocurrency regulations in anticipation of the European Union’s forthcoming Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) legislation, set to take effect on December 30. Finance Minister Jack Chambers informed the cabinet about the urgent need for updates to existing crypto laws, according to a report from the Irish Examiner on October 16.
While specific details of the upcoming legislation remain under wraps, the urgency stems from the EU's AML/CFT act, which will significantly enhance the powers of financial intelligence units, allowing them to suspend suspicious transactions. The legislation will also impose stricter reporting requirements for cryptocurrency exchanges and establish a €10,000 ($10,850) limit on cash payments, as well as enhanced monitoring of large transactions, accompanied by additional reporting mandates for high-value activities.
This legislative framework aims to mitigate risks associated with crypto assets and crowdfunding, complementing other regulations like the Markets in Crypto-Assets (MiCA) regulation. Derville Rowland, deputy governor of the Central Bank of Ireland, emphasized the country's commitment to fostering innovation in the financial sector under MiCA. She stated that robust crypto regulations are essential for Europe to lead in adapting to and adopting new technologies.
The MiCA regulations, distinct from the AML/CFT act, have been in effect since June 2023. The Central Bank of Ireland has highlighted the importance of safeguarding its financial system from misuse related to money laundering or terrorist financing, especially given Ireland’s status as a small, open economy with a growing financial services sector. As of July, the Central Bank had authorized 15 virtual asset service providers, including prominent firms like Gemini, Ripple, Paysafe, Moonpay, and Coinbase.
In line with regulatory requirements, Coinbase has committed to removing non-compliant stablecoins from its European platform. This shift underscores the broader industry preparations for MiCA, a comprehensive regulatory framework designed to create consistency in crypto regulation across EU member states. Approved by the European Parliament in April 2023, MiCA is being implemented in stages, with specific requirements for stablecoin issuers phased in gradually. Notably, Circle, the issuer of USDC, became the first global stablecoin firm to achieve compliance with MiCA on July 1.
Despite the optimism surrounding MiCA, some industry participants have voiced concerns about the framework's complexity. Tether CEO Paolo Ardoino criticized MiCA’s potential risks, particularly following Bitstamp's announcement to delist USDT, suggesting it could complicate operations for stablecoin issuers. Similarly, Binance has adjusted its strategy by limiting access to unauthorized stablecoins in Europe, though it has not completely delisted them.
Implementing the MiCA regulatory framework has also presented challenges for blockchain companies and decentralized finance (DeFi) protocols, as they navigate the new landscape of compliance and regulation. As Ireland prepares for its own crypto regulatory updates, the focus will be on ensuring that the financial system remains secure while fostering innovation within the crypto sector.
October 2024, Cryptoniteuae