The establishment of the European Union’s new Anti-Money Laundering Authority (AMLA) in Frankfurt, Germany, the financial hub of the nation, is set to commence operations by mid-2025. This oversight body will be empowered to regulate “high-risk and cross-border financial entities,” including cryptocurrency firms operating across borders or deemed high-risk. Coordination with financial intelligence units and regulators across EU member states will be integral to its oversight activities.
Frankfurt emerged as the chosen city for AMLA’s headquarters, as announced in a joint press release by the Council of the EU and the European Council on February 22. Notably, Frankfurt also hosts the European Central Bank. Alternative locations considered included Brussels, Dublin, Madrid, Paris, Rome, Riga, Vilnius, and Vienna.
AMLA’s governance structure will involve a general board with representatives from regulators and financial intelligence units of all EU member states, and an executive board comprising the chair and five independent full-time members.
The EU’s first comprehensive framework for cryptocurrencies, the Markets in Crypto-Assets (MiCA), was enacted in June 2023. Specific rules governing stablecoins and crypto-asset service providers are expected to take effect in June and December 2024, respectively.
Simultaneously, the EU has been actively formulating regulations concerning artificial intelligence (AI). On February 13, the European Parliament’s Internal Market and Civil Liberties Committees endorsed a preliminary agreement on the European AI Act, marking the world’s inaugural AI-focused legislation. This act seeks to establish safeguards, including copyright protection for creators, in response to generative AI models, and prohibits AI applications threatening citizens’ rights, such as biometric categorization and social scoring. The first parliamentary vote on the AI Act is scheduled for April 2024.