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EU Proposes Blockchain Register to Combat Money Laundering

EU Proposes Blockchain Register to Combat Money Laundering
Arnaud Schwartz
Arnaud SchwartzCo-Founder at Marble

In a landmark move to strengthen the fight against fraud and money laundering, the European Union has proposed a new regulation requiring all credit and payment institutions operating in Europe to report their transactions to a centralized blockchain register. Spearheaded by the newly established AntiMoney Laundering Agency AMLA, the proposal aims to provide real-time tracking and analysis of financial flows, leveraging blockchain technology to prevent the circulation of illicit funds and the use of mule accounts.

The initiative, set for implementation in 2026 if approved, would obligate institutions to verify the origins of funds by cross-referencing them against a blockchain database of all past transactions processed in Europe, account by account. Inspired by the way platforms like Chainalysis scrutinize cryptocurrency wallets, this system seeks to bring unprecedented transparency to fiat transactions.

“Integrating blockchains traceability into traditional finance is a game-changer, said an AMLA spokesperson. “By allowing institutions to identify and block suspicious funds at the source, we can close loopholes exploited by criminals. This proposal echoes the “Travel Rule already imposed on cryptocurrency transactions, which mandates the sharing of sender and receiver information to curb illicit activity.

As cryptocurrencies adopt more robust compliance measures, fiat systems are now borrowing strategies to bolster their defenses. However, the plan has sparked backlash from privacy advocates. Civil liberties organizations argue that the proposed system threatens to erode financial privacy, raising concerns over mass surveillance and potential misuse of centralized data.

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