Privacy is a ‘Continuous Struggle’ Between Blockchain Participants and Government Authorities

Participants in the blockchain industry and regulators are in ongoing discussions about privacy rights as the European Union’s extensive Anti-Money Laundering (AML) regulations are set to prohibit privacy-focused tokens and anonymous crypto accounts beginning in 2027.

Under the EU’s upcoming Anti-Money Laundering Regulation (AMLR), which will take effect in 2027, credit institutions, financial entities, and crypto asset service providers (CASPs) will be barred from managing anonymous accounts or dealing in privacy-oriented cryptocurrencies, as reported by Cointelegraph in May.

The fight to maintain access to privacy-focused coins like Monero (XMR) has been a “constant battle” between blockchain industry players and regulators, according to Anja Blaj, an independent legal consultant and policy expert with the European Crypto Initiative.

“When you consider how states wish to implement their policies, they aim to establish control. They want to comprehend who the parties are that transact with each other,” Blaj remarked during Cointelegraph’s daily live X spaces show on September 3.

“[The state] wants to understand that to be able to prevent whatever crime and scamming is happening, and we want to uphold the policies we create as a society.”

Her remarks coincided with the EU intensifying its regulatory scrutiny of the crypto sector, building upon the bloc’s Markets in Crypto-Assets Regulation (MiCA).

Related: Swiss banks complete first blockchain-based legally binding payment

Room for negotiation remains

Although the AML framework is finalized, regulatory experts believe there is still potential for negotiation prior to its implementation in 2027.

Policymaking is a “continuous conversation,” indicating that “nothing is set in stone, even if the regulation has already been issued,” stated Blaj. “There are still avenues to engage with regulators, observe how it will unfold, and how it will be enforced.”

While negotiations with policymakers are always possible, regulations regarding privacy-preserving cryptocurrencies and accounts are becoming “more stringent as they do not align with the interests and planning of the states,” she added.

Related: Bitcoin whale awakens after 12 years, transfers 1,000 BTC before US Fed meeting

The opposition to crypto privacy coincides with a separate EU initiative, known as “Chat Control,” gaining traction.

This plan would mandate platforms like WhatsApp and Telegram to examine every message, photo, and video shared by users, even those secured with end-to-end encryption.

Fifteen member states support the bill, but this backing does not represent 65% of the EU population, the necessary threshold for adoption. Germany has remained cautious, but a shift in policy could be pivotal.