Yesterday the EU reached agreement on the Transfer of Funds Regulation #TFR. Details are still emerging, but here’s the TLDR: it’s not as bad as it could have been, but it won’t help the EU seize the Web3 Revolution.
We’ve been sounding the alarms on this since April. The TFR has always been a threat to Europeans’ #freedom and #privacy, so we had to call it out and make our voice heard by policymakers: ledger.com/blog-why-the-e…
We published in-depth research demonstrating how the TFR would violate Europeans’ fundamental rights, expose them to greater risk of harm, and impair Europe’s competitiveness. We also suggested 4 concrete policy proposals: ledger.com/blog-how-can-t…
And we worked to educate policymakers in the European Council, Parliament and Commission on the TFR’s unintended consequences. We’re especially grateful to the French Presidency @Europe2022FR for engaging with us throughout the process.
We won some and we lost some, but the final agreement is much improved from how it started. This is exactly why smart advocacy is so important!
Among the good news from yesterday’s agreement is that peer-to-peer transfers are not subject to the TFR, which is good for #freedom, and that self-hosted wallets are not banned, which is good for #security and #self-sovereignty.
Most importantly for Europeans’ #privacy, there will be no automatic reporting of identity or transaction data to government agencies, but data must be turned over upon valid request.
On the other hand, transfers above 1000 euro from a customer’s CASP account to their self-hosted wallet must be verified by the CASP. This is not ideal, but at least there’s a threshold and scope is limited to the CASP/customer relationship.
CASP to CASP transfers of any amount must include KYC info and transfers from a CASP to any other self-hosted wallet or non-EU CASP are subject to risk-based verification.
These rules will come into effect the same time as #MiCA, 18 months after enactment, which looks like January 2024.
This is just the start of EU digital asset regulation. MiCA is next and much more in the pipeline. The TFR could have been a lot worse, but we must remain vigilant. Web3 in Europe must invest and engage in policy to have a seat at the table.
Listen to our Twitter Space with our Head of Global Policy @SethHertlein and @DigitalDcgg's Frencesca Salierno to recap the EU's TFR and its implications: twitter.com/i/spaces/1vAxR…
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