Over the past few months, European nations including Germany and France have begun to express their concerns towards the anonymity of digital currencies such as Bitcoin and Ripple, and their involvement in financing of terrorism.
Due to the increase in the use of Bitcoin in purchasing illicit goods on the dark web and hacking attacks, Germany and France have been pressuring the EU Commission to implement improvised policies to control electronic and anonymous payment systems.
The federal government of Germany has already taken the necessary procedures to file an official proposal regarding the reform of the Customs Administration Act, to allow the customs to monitor cross-border cash movements and electronic money such as Bitcoin transactions.
However, government officials of Germany have not disclosed the methods that will be implemented in revealing digital transactions and settlement of electronic money. In essence, the German government is attempting to regulate Bitcoin transactions by classifying them as a form of cash movement and possibly demand tax payments per each transaction.
If the European Commission confirms the requests of these two nations, Bitcoin startups and investors will be negatively affected, and may possibly be required to provide sensitive financial and user data to government agencies for inspection.
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