EU travel rule for crypto-assets set to apply from January 2025 | Shearman & Sterling LLP

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On April 20, 2023, the European Parliament announced that it had formally approved the draft Regulation on Information Accompanying Transfers of Cryptographic Funds and Assets (hereafter referred to as the EU Travel Rules Regulation). The draft regulation on crypto-asset markets (MiCA) was also adopted.

The current EU Wire Transfer Regulation (EU WTR) requires the EU payment service provider to ensure that originator and beneficiary information accompanies a transfer of funds. Funds can be denominated in any currency and include banknotes and coins, scriptural money and electronic money.

The EU Travel Rules Regulation will extend the requirements to Crypto-Assets and Crypto-Asset Service Providers (CASPs), (both as defined in the draft MiCA Regulations) with information on the sender and beneficiary must accompany any transfer of crypto-assets, whether national or cross-border. The requirements will not apply to person-to-person transfers of crypto assets where a CASP is not involved, or where the originator and recipient are both crypto asset transfer providers acting on their own account.

The regulation on EU travel rules still needs to be published in the Official Journal of the European Union before coming into force. It will probably be around July of this year. At that time, the EU Travel Rules Regulation will repeal the EU WTR, but existing requirements for information accompanying remittances will be transferred to the new regulation. The EU Travel Rules Regulation will apply from the same date as the MiCA Regulation, which is expected to be January 2025.

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