EBA Unveils Crypto Guidelines to Strengthen EU Financial Security
The European Banking Authority (EBA) has introduced comprehensive guidelines for crypto and payment service providers, marking a significant step in strengthening the European Union’s financial regulatory framework. The new directives, announced November 14, aim to enhance compliance with EU sanctions and restrictive measures while addressing vulnerabilities in the rapidly evolving digital finance sector.
Under the new framework, Crypto-Asset Service Providers (CASPs) and Payment Service Providers (PSPs) must implement robust screening systems to prevent sanctions evasion and ensure compliance with EU restrictive measures. The guidelines, set to take effect December 30, 2025, come at a crucial time as Europe solidifies its position as a major cryptocurrency hub, with the region recording $987.25 billion in on-chain value between July 2023 and June 2024.
“Weaknesses in internal policies, procedures and controls expose financial institutions to legal, reputational risks, and undermine the effectiveness of the EU’s restrictive measures regimes,” the EBA stated, emphasizing the need for stronger governance structures.
The guidelines are split into two distinct sets. The first addresses broad governance and risk management systems for all institutions within the EBA’s supervision. The second specifically targets PSPs and CASPs, detailing compliance requirements for fund and crypto-asset transfers.
This regulatory enhancement aligns with the EU’s broader Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) reforms, initiated through a legislative package in July 2021. The measures complement Regulation (EU) 2023/1113, adopted in June 2023, which established new rules for information accompanying financial transfers.
The timing is particularly relevant as Europe’s crypto market continues to mature, with the United Kingdom leading regional innovation with $217 billion in crypto inflows. Stablecoins have emerged as a dominant force, accounting for nearly half of the region’s crypto transaction volume at $422.3 billion.
Financial institutions now have approximately one year to align their operations with these new requirements, ensuring their screening systems and internal controls meet the EBA’s enhanced standards for regulatory compliance.
