Blockchain the way it works, anonymous, ledger based and without letting two endpoints know who and why but only when. In case of the govt they are after the people and their transaction, they want to know who is doing it and why they are doing it and when is already in their hands.
In short, govt wants to do the centralization at such an extent that they are going to be doing the regulation that would make people reveal themselves and so it does not remain crypto. It remains visible in persona and both who and why is kind of written on ledger.
In short, crypto travel rule like this is what EU plans on bringing in their blockchain based new digital eu narrative. Let's talk about this new regulation that is about to be passed in EU.
What is Crypto Travel Rule?
In crypto transaction we have an address. Say you have some address which is in hex format. And I have an address which is in another hex format. And you send money to me through such address. None of us know who is at the end other end. And we don;t know the motive for sending money either.
This is considered dangerous in the eyes of the govt. Because here terrorism can breed. And you can not undo those transactions. So here govt around the world want to watch the wallets offered by the exchanges and also the wallets under control of the govt backed banks too. So it would be imposed through the regulation rule.
Guidelines for Crypto Assets Service Providers (CASPs)
European Banking Authority along with the BIS standard body that is working on the regulation is taking consultation on the crypto travel rule. So they are taking the inputs from the business and the exchanges that are supposed to follow the guidelines on the crypto travel rule and they are also supposed to keep wallet in such ways that it would track the two entities.
So in short the ledger would be more open than the SWIFT and they would keeping eye on everything that business and the exchanges has to offer to the consumers. Which makes the digital euro so much centralized that they would be keeping control of your asset and you'd be happy that you own nothing.
Obstacles in Centralization and Limits of CBDCs
You can't really keep everything anonymous is how CBDCs are meant to be planned in the EU. And they are going to be harder to track the crimes, frauds, swaps and also the variety of the anonymous sending through the channels is how many people would realize that crypto travel rule is even going to work out properly.
If too much banks get involved then govt also have to keep an eye on the banks meddling in the accounts of the people. And that would mean who watch the watchers? And that is something govt have to plan out and make more or less regulated in such way that it benefits consumers and there would not be muhc loopholes.
In theory it all sounds easier but executing centralization by trying to rewrite the decentralized code is not easier. However with the SWIFT and IBAN in the hands, many govt can just push the centralized code under the CBDC and so they don't have to worry about the crypto travel rule. Let's see what the EU banks do for the Digital Euro CBDC in upcoming future.