2017 has been a stellar year for cryptocurrency and Bitcoin in particular. Price rises and widespread public appeal has seen cryptocurrencies ride the crest of a wave for most of the year. One potential fly in the ointment though is the proposed EU regulations that are due to come into law in early 2018.
Regulations to combat crime
It would seem that many EU nations and the UK are concerned about the potential cryptocurrencies have for criminal use. Digital currencies have the distinct possibility of being used for nefarious purposes, such as tax evasion and money laundering. Some also worry that cryptocurrencies could also be used in the pursuit of other criminal activities, such as drug dealing.
The ultimate aim of these regulations is to bring digital currencies, such as Bitcoin, in line with current anti-money laundering and counter-terrorism regulations in other financial areas.
How will it affect investors?
If you’re an investor in any cryptocurrencies, these new EU regulations will affect you. Under the new laws, cryptocurrency traders will have to reveal their identities, removing the anonymity that many are involved with it for. Coin exchanges will also be required to perform due diligence on customers to ensure only reputable people are using them. In addition to this, the exchanges will be required to keep a close eye on all transactions and report any suspicious ones to the relevant authorities.
The markets will wait to see how this affects them
Although many would disagree, it is clear that the relevant officials in the EU feel these steps are necessary to prevent potential crimes. It will be interesting to see how the financial markets react early next year when these laws have come into place. With the unique privacy cryptocurrencies currently offer being removed, many investors may lose interest.
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