Dáil Éireann Debate, Tuesday - 8 September 2020
266. Deputy Pa Daly asked the Minister for Finance his views on the implications of the EU fifth anti-money laundering directive with respect to the regulation of digital, virtual and cryptocurrencies; and if he will make a statement on the matter. [21603/20]
Amharc ar fhreagraOn 30 May 2018, the European Parliament adopted Directive EU 2018/849, known as the Fifth EU Anti-Money Laundering Directive (5AMLD).
With regard to digital, virtual and cryptocurrencies, the Directive applies to providers of certain services relating to virtual currencies. 5AMLD defines virtual assets as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically.”
As such, the EU 5AMLD supervision requirements extend only to two activities, namely:
1. providers of exchange services between virtual assets and fiat currencies; and
2. custodian wallet providers.
Accordingly, the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2019, which I expect will publish shortly, provides for the addition of “providers engaged in exchange services between virtual currencies and fiat currencies” and “custodian wallet providers” to the category of “designated persons”.
Designated persons are those who have obligations in regard to anti-money laundering and countering the financing of terrorism. It is proposed that the Central Bank of Ireland shall serve as the competent authority for these specific designated persons once those provisions take effect.
Government approval has also been secured to bring forward amendments to the Bill, to suitably strengthen and extend the Central Bank's ability to supervise these entities and activities. These provisions will provide for the necessary registration and fitness and probity regime, required by 5AMLD for virtual asset service providers. It is also proposed to future proof our approach, by introducing amendments, to the published Bill, that will address our obligations as a member of the Financial Actions Task Force (FATF), which is the international organisation that sets global standards for AML/CFT. The FATF Standards go further than 5AMLD, in requiring supervision for five separate activities, including the two mentioned above.
Work is ongoing with the Office of the Attorney General in this regard.
