Is the EU about to impose on itself state-by-state licensing of digital currency businesses?
The easy "passporting" of licenses in the EU has been seen as a competitive edge for the bloc, but would be undermined if legislators pursue a new route proposed by the EBA requiring dozens of state-by-state AML registrations.
That’s the concern raised by Diacle’s Adam Vaziri in response to a new European Banking Authority report on applying EU anti-money-laundering rules to exchanges and wallets:
[T]he EBA’s remarks notably mention that VC exchanges and wallets operating in multiple countries in the EU “may […] be required to be registered or licensed in each Member State in which they intend to provide VC-related services“.
The seemingly small aside in the nine-page response is notable, as such a measure would be akin to the state-by-state registration process that VC exchanges have to do in the US.…
Usually that process can take between three to six months, however, the VC exchanges and wallets will now need to contend with language barriers, administration and bureaucratic fragmentation in each member state where it wants to do business.
It is sadly ironic that registering in 50 states in the US may be easier as at least the process is in one language. The same state-by-state requirement in the EU will mean the VC exchange operator will need to contend with 24 official languages.
In the U.S. businesses face one national AML regulator and dozens of state consumer protection licensors. The easy “passporting” of licenses in the EU has been seen as a competitive edge for the bloc. That would be undermined if legislators pursue a new route that retains single “passportable” consumer protection licensing, but then require dozens of state-by-state AML registrations.