EU, is it really okay for you to register digital currency users’ information in this way?

The European Commission has submitted plans to create a centralized database of digital currency users, which the EU believes could prevent terrorist financing and money laundering.

The European Commission said that transactions in virtual currencies, including Bitcoin, are not monitored by public institutions in the European Union and a regulatory framework for digital currency platforms must be established.

"To achieve this purpose, authorities will need to collect, process and record personal data and sometimes share that data with the public sector," part of the proposal reads.

The European Commission stated in Article 65 of the 4th Anti-Money Laundering Directive that a central database of virtual currency users will be established in June 2019 in order to provide a regulatory framework for digital currency startups - which may require all EU digital currency startups to collect private and sensitive information of their customers.

The European Commission proposes: “Appropriate proposals, including in relation to virtual currencies, should be mandated to set up a central database of user information and wallet addresses, accessible to financial intelligence units (FIUs), as well as a form of self-declaration by users of virtual currencies.”

Core Issues

The European Union’s ambitious plan to create a centralized database for users of decentralized digital currencies has two core concerns: violations of personal data and the bloc’s fraught cybersecurity issues.

EU government agencies, law enforcement agencies, and non-profit organizations have been the target of thousands of public data attacks since 2004. An estimated 229 breaches of public records were discovered in these attacks, exposing the vulnerability and outdated nature of EU government information systems.

Ironically, the European Union and its Cybersecurity Department, which have long been involved in the dark web and Bitcoin trade, are now proposing to create a central database containing personal, private, and sensitive financial record information of millions of digital currency users under the illogical pretext that digital currency funds can cause terrorist financing and illegal transactions.

Maybe it’s the mainstream media’s fault, but cash is a better way to buy and sell illegal items and finance terrorism for a simple reason: cash is completely anonymous, while digital currencies are not.

Cryptocurrencies based on public or shared ledgers are transparent and decentralized. Therefore, anyone on the network can access data on financial transactions. Earlier in 2016, Europol used this network "flaw" of Bitcoin to track down Silk Road traders.

If the basis of the Commission’s argument is that centralized virtual currencies can prevent the sale of illegal drugs and the financing of terrorism, then it makes more sense for the Commission to enforce this plan against people who use cash, because more drug sales and money laundering are done with cash.