The EU bans anonymous crypto: turning point by 2027

The European Union (EU) is preparing to introduce one of the most impactful regulations in crypto history: by 2027, both anonymous crypto accounts and the so-called privacy coins, such as Monero and Zcash, will be banned.

The decision is part of a broader package of anti-money laundering (AML) measures, aimed at strengthening financial transparency and combating the illicit use of digital assets.

According to what is reported in the AML Manual published by the European Crypto Initiative (EUCI), the new Anti-Money Laundering Regulation (AMLR) will prevent credit institutions, financial institutions, and crypto-asset service providers (CASP) from maintaining anonymous accounts or managing cryptocurrencies that offer anonymization mechanisms.

What the EU AMLR provides: farewell to crypto anonymity by 2027 

Article 79 of the AMLR clearly and unequivocally establishes that it will be prohibited to maintain anonymous accounts. 

This does not concern only cryptocurrencies, but it also extends to conti bancari, conti di pagamento, libretti di risparmio, and casseforti. 

In particular, the regulation targets crypto-asset accounts that allow the anonymization of transactions and those that use coins with anonymity features.

Cryptocurrencies like Monero and Zcash, known for their advanced transaction obfuscation tools, will be banned. 

These tokens, designed to ensure maximum confidentiality, have long been in the sights of regulatory authorities for their potential use in illicit activities, such as money laundering and the financing of terrorism.

Although the regulatory framework is already defined, some technical details still need to be clarified through the so-called implementing and delegated acts. These will be largely managed by the European Banking Authority (EBA).

According to Vyara Savova, senior policy officer at the EUCI, the organization is still actively engaged in providing feedback during public consultations to finalize these aspects.

Savova emphasizes that progetti crypto centralizzati, or CASPs regulated by MiCA (Markets in Crypto-Assets Regulation), must already begin to prepare internally to comply with the new rules, reviewing business processes and policies.

Another key element of the new regulatory framework concerns the direct supervision of CASPs operating in at least six EU member states. 

Starting from July 1, 2027, the Anti-Money Laundering Authority (AMLA) will select 40 entities to be subjected to control, ensuring at least one for each member state.

The selection will be based on thresholds of relevance, such as:

• – A minimum of 20,000 resident clients in the host Member State.
• – A total transaction volume exceeding 50 million euros.

These criteria aim to ensure that only companies with a significant operational presence in multiple jurisdictions are subject to direct supervision.

Obligations of due diligence

Among the new measures, the obligation of due diligence for all transactions exceeding 1,000 euros also stands out. This implies a more rigorous check on the identity of the clients and the origin of the funds, with the aim of preventing suspicious or illegal activities.

These new provisions represent a further piece in the ambitious project of the EU to comprehensively regulate the cryptocurrency sector.

After the introduction of the MiCA regulation, which laid the foundations for a harmonized supervision of crypto markets, the AMLR is now focusing on a crucial aspect: transaction transparency and the fight against anonymity.

The adoption of these measures marks a radical change for the European crypto ecosystem. On one hand, it strengthens the trust of institutional investors and reduces the risk of abuses, while on the other hand, it raises questions about user privacy and financial freedom.

Implications for the future of the sector

The entry into force of the AMLR by 2027 will force many operators in the sector to rethink their business models. 

The privacy coin, which so far have represented an important niche for those seeking privacy in digital transactions, risk being excluded from the European market. 

At the same time, CASPs will need to invest in increasingly sophisticated compliance systems to meet the new regulatory requirements.

The message from the European Union is clear: in the future of European cryptocurrencies, there is no room for anonymity. Transparency and responsibility become the pillars on which to build a safer and more reliable market.

With the entry into force of these regulations, Europe is positioning itself to become one of the strictest jurisdictions in the world in terms of crypto regulation, paving a path that could also be followed by other countries in the coming years.