The Cabinet, the executive organ of the government of Ireland, has approved a bill that would give effect to the European Union (EU) Fifth Anti-Money Laundering (AML) Directive, the Irish Times reported Jan. 3.
The directive — which came into force on July 9, 2018 — sets a new legal framework for European financial watchdogs to regulate digital currencies in order to protect against money laundering and terrorism financing.
Specifically, the directive will extend the scope to crypto platforms and wallet providers, end the anonymity of bank and savings accounts, and improve information exchange among authorities. EU member states must incorporate the directive into their respective national laws by Jan. 20, 2020.
In addition to recognizing the EU directive, the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2019 would toughen existing legislation, including the use of “virtual currencies for terrorist financing and limiting the use of prepaid cards.” Minister of Justice Charlie Flanagan said:
“The reality is that money laundering is a crime that helps serious criminals and terrorists to function, destroying lives in the process… Criminals seek to exploit the EU’s open borders and EU-wide measures are vital for that reason. Ireland strongly supports the provisions in the fifth EU money laundering directive. ‘’
If the bill passes, financial institutions will be required to perform stricter due diligence in respect to new clients, and would be prohibited from opening anonymous safe deposit boxes. Additionally, the bill will reportedly allow the Garda and the Criminal Assets Bureau to access bank records in the course of money laundering investigations.
“Putting digital versions of national currencies on the blockchain means they could then become integral parts of smart contracts. That would unlock much of the potential innovation of blockchain by allowing parties to create automated agreements, including direct transactions in these currencies, instead of having to use a cryptocurrency as a proxy.”
Also in December, crypto-friendly fintech startup Revolut obtained an EU banking license through the Bank of Lithuania. Revolut’s users in the United Kingdom, France, Germany, and Poland are expected to get a “true current account and a non-prepaid debit card.” Additionally, users’ deposits will also be covered up to €100,000 (about $113,500) under the European Deposit Insurance Scheme.