The French government has moved to limit the anonymity of French Bitcoin users.
The new regulations, set out by the country’s finance ministry in response to a report by its Tracfin money laundering unit, will come into effect at the end of the year.
Bitcoin is a way of making transactions that bypass the banking sector, and according to the report transacting using Bitcoin makes it easier to launder money and cover up illegal activity. In order to reduce these risks, the report proposes to limit virtual currency flows and the anonymous status of users.
In response to this report the new regulations require Bitcoin “distributors” to identify and verify their users to limit the level of anonymity.
Ultimately, the regulations are presented as a means to promote greater transparency in France’s Bitcoin market. Due to the pseudonymous nature of Bitcoin, the document also calls on regulators to discuss and present a spending cap for digital currency transactions, in keeping with the current rules for cash payments.
Greater transparency is essential for Bitcoin’s widespread adoption – something that Jumio keenly promotes through BISON.