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Estonia clarifies that it will not ban cryptocurrencies, new rules will only apply to VASPs

  • The Estonian Ministry of Finance has clarified that cryptocurrencies will not be banned under the new anti – money laundering guidelines.
  • However, cryptocurrency service providers (VASPs) will face new obligations, such as conducting audits and obtaining licenses.

Estonia has made it clear that it is not going to ban cryptocurrencies in the country, although it is looking for stricter rules on money laundering.

The country is currently implementing anti-money laundering policies that affect cryptocurrency service providers. The draft legislation proposes laws that will require crypto companies to raise their due diligence standards, conduct audits, and maintain higher levels of capital. With the project came rumors that the government would end decentralized money (DeFi) and unprotected portfolios.

In addition, the nation’s prime minister, Kaja Kallas, was skeptical about the acceptance of Bitcoin and other cryptocurrencies in the country. It was firm despite lobbying cryptocurrencies by major players in the sector, such as Coinbase.

More information: Despite Digital Focus and Coinbase Lobbying, Estonian PM rejects Bitcoin

Estonia and crypto assets

“I know one of my predecessors was a huge proponent of cryptocurrencies, but I am very cautious,” Kallas said in an earlier interview.

He also argued that there is no chance for Estonia to legalize Bitcoin as a legal tender like El Salvador.

We are sensitive to these issues, and cryptocurrencies, as they are used, are a big problem because you see cybersecurity and the ease with which companies pay money. [de los rescates].

However, the Estonian Ministry of Finance has issued a clarifying statement, stating that the new rules apply exclusively to Virtual Asset Service Providers (VASP). These types of actors handle crypto assets on behalf of their clients. Thus, Estonian citizens can continue to trade or buy digital assets cheaply.

«There is no measure in the legislation that prohibits customers from owning and trading virtual assets and does not in any way require customers to share their private wallet keys,» the statement read, adding He added: «The regulation does not affect individuals with virtual currency through a private wallet not provided by VASP.»

New requirements for cryptocurrency service providers

The proposed guideline limits VASPs to open and own anonymous cryptocurrency wallets, increasing government oversight of their cash flows. According to the official government website, the new bill comes after the Financial Action Task Force (FATF) persuaded to regulate cryptocurrencies and VASPs.

In 2017, Estonia agreed to issue operating licenses to VASPs, becoming one of the first nations in the world to do so. Over time, however, concerns grew that the country would become a hotbed for money laundering. For this reason, 2,000 VASP licenses were revoked, leaving only 400 licensed companies. In addition, the new guidelines state that new licenses will only be granted to Estonian – based companies subject to regulatory control.

Jean Simmons

Jean Simmons has been a cryptocurrency enthusiast since 2014 and has been dedicated to the topic on a daily basis since she first learned about Bitcoin and blockchain technology. Besides cryptocurrency, Jean studied computer science and worked for two years at a blockchain startup. At Mercayala, he is responsible for technical issues. His goal is to bring cryptocurrencies to the world in a simple and understandable way.

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