European Union Plans Privacy Token Ban—What It Means for Crypto in 2027

• Under Europe’s AMLR, CASPs, banks, and financial institutions will be strictly prohibited from facilitating transactions involving anonymity-enhancing crypto coins or accounts.
• Centralized crypto platforms under the EU’s Markets in Crypto-Assets Regulation (MiCA) must align their policies with these new rules, which include mandatory identity checks.

Starting in 2027, the European Union is poised to enforce sweeping anti-money laundering measures that, essentially, will ban privacy-oriented cryptocurrency and anonymous crypto accounts. These are part of the forthcoming EU AMLR, which will be the essence of the new EU financial transparency regime.

EU To Ban Privacy Crypto Amid AML Push

With a new regulatory structure, crypto asset providers (CASPs), banks and other financial institutions will not be allowed to facilitate transactions involving privacy-enhancing digital assets. These include cryptocurrencies such as Monero (XMR), Zcash (ZEC), and others. Also, CASPs will be barred from operating anonymous accounts.

According to the AML Handbook released by the European Crypto Initiative (EUCI), “Article 79 of the AMLR establishes strict prohibitions on anonymous accounts […]. Credit institutions, financial institutions, and crypto-asset service providers are prohibited from maintaining anonymous accounts.” This includes not only accounts but also any tools or platforms enabling transaction anonymisation.

It is the first part of a wider legislative trio comprising the Anti-Money Laundering Directive (AMLD), the Anti-Money Laundering Authority Regulation (AMLAR), and the Anti-Money Laundering Regulation (AMLR) as part of efforts to strengthen the EU’s financial surveillance capacity both in the traditional and digital environment, as reported in our last news story. Targeted among the assets are “crypto-asset accounts allowing anonymisation of transactions” and “accounts using anonymity-enhancing coins.”

The broad legislation has been drawn up, but more detailed aspects of implementation are still being worked out. The details of these will be defined by delegated and implementing acts and to a large extent through the supervision of the European Banking Authority.

EUCI Executive Offers Important Remarks

Vyara Savova, senior policy lead at EUCI, noted the importance of these remaining steps. She stated, “This means that the EUCI is still actively working on these level two acts by providing feedback to the public consultations, as some of the implementation details are yet to be finalized.”

She further emphasized that despite the pending specifics, the framework itself is now set, and centralized crypto platforms operating under the Markets in Crypto-Assets Regulation (MiCA) must begin adjusting their policies accordingly. “The broader framework is final, so centralized crypto projects (CASPs under MiCA) need to keep it in mind when determining their internal processes and policies,” Savova added.

Beyond asset restrictions, the regulation will also increase scrutiny of crypto firms operating within the EU. CASPs that maintain operations in six or more member states will fall under direct oversight by the new Anti-Money Laundering Authority (AMLA). A phased selection process will commence on July 1, 2027, with an initial focus on 40 firms—ensuring at least one per member state.

The AML Handbook notes that AMLA will apply “materiality thresholds” to identify which CASPs qualify for direct supervision. These include serving “a minimum of 20,000 customers residing in the host member state.” In another case, it concerns conducting annual transactions exceeding €50 million ($56 million). Additionally, customer identity checks will become mandatory for all crypto transactions above €1,000 ($1,100).