EBA extends travel rules to combat money laundering

The European Banking Authority (EBA) has expanded its travel guidelines to include cryptocurrency service providers and intermediaries.

In essence, the aim of this move is to combat money laundering and terrorism financing. Regulation (EU) 2023/1113, which has been in force since 30 December 2024, requires cryptocurrency exchanges operating in the European Union to comply with strict reporting rules on transfers of funds and crypto assets. This initiative, in line with the EU Markets in Crypto Assets Regulation (MiCA), subjects crypto asset service providers to the EU’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework.

Payment Service Providers (PSPs), intermediary PSPs, cryptoasset service providers (CASPs) and intermediary CASPs have a two-month grace period to demonstrate compliance, including collecting user information and identifying the purpose of a transaction.

The EBA acknowledges the potential financial impact on cryptocurrency exchanges and service providers, but says the long-term benefits of enhanced AML/CFT measures justify the upfront costs as the guidelines are expected to strengthen efforts to combat money laundering and terrorist financing.

Blockchain protocols response

Meanwhile, in response to increased regulatory oversight in Europe, blockchain protocols are adapting. The Cardano Foundation, working with the Crypto Carbon Ratings Institute, has developed sustainability metrics for the Cardano network. This initiative ensures compliance with MiCA regulations, highlighting Cardano’s energy-efficient proof-of-stake protocol compared to energy-hungry proof-of-work alternatives.

The sustainability report includes detailed data such as annual electricity consumption, carbon footprint, and marginal energy demand per transaction per second. By adhering to these standards, Cardano aims to promote environmental sustainability on blockchain technology while meeting regulatory requirements.