The European Union is proposing a ban on privacy tokens, which could significantly impact the cryptocurrency landscape by 2027.

According to Europe’s AMLR, cryptocurrency asset service providers (CASPs), banks, and financial institutions are outright banned from processing transactions that involve anonymity-enhancing cryptocurrencies or accounts. Centralized crypto platforms governed by the EU’s Markets in Crypto-Assets Regulation (MiCA) are required to adjust their policies to comply with these new regulations, which mandate identity verification. Beginning in 2027, the European Union plans to implement extensive anti-money laundering initiatives that will effectively outlaw privacy-focused cryptocurrencies and anonymous crypto accounts. These measures are included in the upcoming EU Anti-Money Laundering Regulation (AMLR), which will form the core of the new EU financial transparency framework. The EU plans to prohibit privacy cryptocurrencies as part of its AML efforts. Under the new regulatory framework, crypto asset service providers (CASPs), banks, and other financial entities will be prohibited from conducting transactions that involve privacy-enhancing digital assets. This includes digital currencies like Monero (XMR), Zcash (ZEC), among others. Additionally, CASPs will not be allowed to manage anonymous accounts. The AML Handbook published by the European Crypto Initiative (EUCI) states that “Article 79 of the AMLR imposes stringent restrictions on anonymous accounts.” Financial institutions, credit organizations, and crypto-asset service providers are banned from holding accounts that allow for anonymity. “This encompasses both accounts and any tools or platforms that facilitate transaction anonymity. It represents the initial segment of a broader legislative package that includes the Anti-Money Laundering Directive (AMLD), the Anti-Money Laundering Authority Regulation (AMLAR), and the Anti-Money Laundering Regulation (AMLR). These measures aim to enhance the EU’s financial oversight capabilities in both conventional and digital contexts, as highlighted in our previous news article.” The focus is on assets such as “crypto-asset accounts that facilitate anonymous transactions” and “accounts that utilize coins designed to enhance anonymity.”