The European Union has officially taken a hardline stance against anonymity in the cryptocurrency sector. With the newly approved Anti-Money Laundering Regulation (AMLR) set to be enforced from July 1, 2027, the EU will implement one of its most aggressive crackdowns on digital asset privacy to date.

Among the key provisions of the AMLR is the complete ban on privacy-focused cryptocurrencies such as Monero (XMR) and Zcash (ZEC). These so-called “anonymity-enhancing” coins have long been criticized by regulators for their potential to facilitate money laundering and illicit financial flows. Under the new regulation, both banks and crypto asset service providers (CASPs) will be prohibited from processing anonymous transactions involving these assets.

Additionally, the AMLR bans unidentified crypto accounts—an attempt to close loopholes that have allowed users to bypass identity verification through decentralized platforms and self-custodied wallets. The law makes it clear that the era of anonymous crypto dealings in the EU is coming to an end.

This dramatic shift toward transparency is part of the EU’s broader strategy to bring crypto in line with traditional finance when it comes to compliance and oversight. Article 79 of the AMLR outlines the bloc’s firm position: anonymity must be eliminated to prevent abuse and protect the integrity of financial systems.

But the regulation doesn’t stop at banning certain cryptocurrencies. A newly created entity—the Anti-Money Laundering Authority (AMLA)—will oversee enforcement across the European Union. Beginning in 2027, AMLA will directly supervise up to 40 CASPs that operate in at least six EU member states. To qualify for this supervision, firms must either handle over 20,000 user accounts or facilitate more than €50 million in crypto transactions per year.

This supervision model represents a major leap toward centralizing regulatory authority in Europe’s fragmented crypto landscape. It also aligns with the principles of MiCA (Markets in Crypto-Assets Regulation), the broader legal framework that governs digital assets within the EU.

The European Crypto Initiative (EUCI), a think tank focused on blockchain policy, noted in its AML Handbook that the new regulation doesn’t just affect crypto exchanges. Traditional banks and digital payment platforms will also be required to comply with stricter due diligence and anti-anonymity rules. According to Vyara Savova, Senior Policy Lead at EUCI, while the legislative framework has been finalized, the European Banking Authority will release detailed guidelines through delegated acts closer to implementation.

In parallel to the AMLR’s passage, the European Securities and Markets Authority (ESMA) issued another key decision that impacts the crypto market. It confirmed that entities such as Bitcoin miners, proof-of-stake validators, and searchers are not subject to market abuse monitoring obligations under MiCA. These actors, the ESMA clarified, are not classified as “Persons Professionally Arranging or Executing Transactions” (PPAETs).

Instead, the burden of monitoring and reporting suspicious activity falls squarely on CASPs, including centralized crypto exchanges and brokerages. This separation of responsibility is seen as a balanced approach that allows infrastructure-level participants in blockchain networks to operate without excessive regulatory burden.

Patrick Hansen, EU Strategy Director at stablecoin issuer Circle, welcomed the move, describing it as a “flexible” framework that leaves room for innovation while maintaining critical compliance standards. He emphasized that avoiding a rigid definition of PPAETs allows regulators to adapt as the crypto market evolves.

Still, the EU’s approach has triggered debate across the industry. Critics argue that banning privacy coins and increasing regulatory oversight could stifle innovation and push users toward offshore platforms. Others believe the clarity and consistency provided by the AMLR and MiCA may actually support long-term growth by attracting institutional capital and improving consumer trust.

As Europe sets its sights on leading global crypto regulation, the next two years will be critical. The industry now faces a new reality—one where anonymity is no longer an option, and compliance isn’t just encouraged, but mandated.