New draft legislation for virtual asset service providers (VASPs) in Estonia will not ban customers from owning or trading cryptocurrency, but the proposed requirements could bring about massive capital requirements for decentralized wallet creators, CoinDesk reported Tuesday (Jan. 4).
Estonia Minister of Finance Keit Pentus-Rosimannus said the bill is aimed at strengthening anti-money laundering (AML) requirements for VASPs, especially when it comes to creating anonymous accounts, according to the report. If the bill passes, it will require Estonia VASPs to identify their customers when offering accounts or wallets.
“This means that the legislation does not contain any measures to ban customers from owning and trading virtual assets and does not in any way require customers to share their private keys to wallets,” Pentus-Rosimannus said in a statement Sunday (Jan. 2), per the report.
The Ministry of Finance also posted an informational webpage addressing frequently asked questions about the proposed bill Monday (Jan. 3). The new bill is considered Estonia’s answer to the Financial Action Task Force (FATF) guidance on regulating VASPs, according to Ministry officials, the report stated.
In 2020, the Estonian Financial Intelligence Unit (FIU) withdrew licenses from more than 1,000 cryptocurrency firms, citing poor connections to the nation. If the bill is approved, an Estonian-licensed VASP would have to operate in Estonia or “have a demonstrable connection” to the country, according to the report.
Meanwhile, American cryptocurrency executives and at least two U.S. Senators who own bitcoin may be on the same page when it comes to limiting regulations.
Read more: Crypto Execs, Senators Support Limited Regulations
Six crypto executives testified at a hearing before the U.S. House Committee on Financial Services in December. Two members of the Senate Banking Committee, which listened to the testimony and will be part of the establishment of crypto regulations, own the digital assets.
Sen. Cynthia Lummis owns $250,000 in bitcoin and Sen. Pat Toomey has a smaller share of digital currency. They are the only two U.S. senators who have invested in crypto, arguing their familiarity with it will help them develop the legislation.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More