Potential EU Ban on Bitcoin: Is This a Looming Reality?
The European Data Protection Board (EDPB) has recently presented a draft guideline for handling blockchain technology, aiming to address potential issues arising from the interplay of personal data and this innovative technology. The draft, which is currently in public consultation, is not a binding set of rules but serves as a guide for crypto service providers.
One of the key points in the EDPB draft is the consideration of public keys as personal data if they can be associated with a person. Strict data processing requirements may be imposed on these providers, especially if they link personal data with blockchain addresses. The draft also emphasizes that technical impossibility cannot be cited as a justification for non-compliance with the requirements of the General Data Protection Regulation.
The EDPB recommends that personal data should not be stored on the blockchain if it violates data protection principles. Instead, they suggest storing personal data off-chain. Strict requirements apply for storing personal data on a blockchain: data must be anonymized or deleted when no longer needed, and a retention period for personal data storage on a blockchain must be determined. Deleting data on an individual level in a blockchain can be challenging and may require ad-hoc developed architectures.
The draft guidelines do not imply that Bitcoin could be illegalized in the EU. In fact, the current discussion on an EU-wide ban of Bitcoin does not indicate any concrete plans to prohibit Bitcoin entirely. Instead, the EU is focusing on stricter regulation of crypto assets, including enhanced customer due diligence, monitoring, and transaction reporting for crypto service providers, as part of broader financial market regulations and anti-money laundering efforts.
Tristan, the editor-in-chief at Blocktrainer.de, has been actively involved with Bitcoin since 2020 and gained journalistic experience outside the Bitcoin space. Before his involvement with Bitcoin, Tristan was interested in libertarian economic theory. It is worth noting that an MEP called for a Bitcoin reserve, adding to the ongoing debate about the future of cryptocurrencies in the EU.
The EU is also concerned about loss of sovereignty and financial instability due to Trump's crypto policy. However, the focus remains on ensuring data protection and financial stability within the EU, as evidenced by the EDPB's draft guidelines.
In conclusion, the EDPB draft guidelines aim to provide a clearer understanding of how personal data should be handled in the context of blockchain technology. While the guidelines do not imply an imminent ban on Bitcoin, they do emphasize the need for stricter regulations and data protection measures for crypto service providers. As the public consultation continues, it will be interesting to see how these guidelines evolve and impact the crypto industry in the EU.
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