Cryptocurrencies have changed how online transactions are made and it may remain to do so in the next few years. Many people use cryptos like Bitcoin and altcoins like Ethereum, Litecoin, and DogeCoin in different ways.
People mainly use these for online transactions as its quicker, safer, and somehow gives them anonymity as much as possible. Some would also use these to avoid the hassle that banks would give them to make online transactions.
In particular, many online gamblers would use cryptocurrencies to protect their bank accounts. This is because they can hop from one online casino to another without having to disclose their banking information every time they make a deposit.
Surely, many online casinos are trustworthy and have the right security to protect their users’ information but Bitcoin casinos simply offer extra protection for their players. Since using cryptos are generally cheaper for these operators, better bonuses are also offered to the customers.
You can check BetEnemy’s review about the Casiniabet bonus offers to know what these offers are. Overall, the use of cryptocurrencies remains to be seen as the future of online transactions and definitely not only in online gambling.
On January 10 of this year, the Fifth Anti-Money Laundering Directive or AMLD5 was rolled out in the EU. This isn’t exactly centered towards cryptocurrencies alone, but this could change the cryptocurrency industry in the EU in two ways.
The AMLD5 requires cryptocurrency exchanges and custodial service providers to register with local regulators and comply with the Know-Your-Customer and anti-money laundering or AML procedures. This basically gives the regime the power to gain financial intelligence units and law enforcement.
This can both positively and negatively impact crypto businesses. We say negatively because what comes with compliance is added costs and this could be tough for small firms. In fact, last December, a crypto-payment processor business called Bottle Pau already announced that it will shut down because of the AMLD5.
According to the business, the enforcement of AMLD5 will make it hard for the company to continue to operate. The business also explained that the information that it will give to the regulators would alter the current user experience radically and even negatively. The people in the business were just really not willing to force it into their community. They’d rather close and so they did.
The implementation of AMLD5 may also be complex as it may be differently implemented from one European country to another. However, this may have a positive effect on crypto businesses in the long run.
Part of this law is to require banks to be more open when it comes to providing their services to crypto businesses. Banks do this because they have to practice de-risking. This is what financial institutions do to avoid risks rather than manage the risks that are in line with the transactions.
Banks do this to avoid concerns about profitability, financial crisis, reputational risks, and to comply with prudential requirements. The Financial Action Task Force of FATF only requires this, however, on a case-by-case basis. Banks should only cut off their ties with businesses if money laundering and terrorist financing are involved.
Crypto businesses don’t immediately fall into that category as it remains to be a safe option to many, but financial institutions practicing de-risking has always been a problem for the crypto-industry. However, with the AMLD5, things will change.
AMLD5 allows digital or virtual assets and virtual asset providers to be recognized as obliged entities. This levels virtual assets and service providers with banks and any other usual businesses. This means that banks can’t just reject transactions with them just because they are in the crypto industry.
This is, of course, as long as the business can secure pieces of evidence that portrays compliance with relevant regulations. As long as they are compliant, they will be treated as normal businesses. Banks should only have valid and specific reasons to deny transactions.
AMLD5 requires to manage the risks instead of avoiding them. The cases and transactions should be assessed individually. Still, this could be a challenge to crypto-businesses because compliance will still cost them money at the end of the day.
It’s possible that smaller firms will have to close or face acquisitions because of the added costs that they can’t afford, but these businesses also know that it could be beneficial in the long run. The implementation of AMLD5 can be seen as a chance or a starting point for the crypto industry to show how committed and serious they are to deliver real solutions.