" class="no-js "lang="en-US"> Blocking payments around Europe, and does it make sense? - Fintech Finance
Thursday, June 01, 2023

Blocking payments around Europe, and does it make sense?

The European region is arguably one of the most forgiving ones in terms of financial transactions. Thanks to the agreements of the EU, most countries can allow inter-transactions to happen with relatively no supervision at all. Naturally, there are some types of regulation applied to each country, but if you were to transfer money from Germany to France, it would usually process within just a couple of hours of making it.

This is all thanks to the agreements within the EEA (European Economic Area). However, fintech companies have been finding it quite hard, to implement their new payment platforms in order to cater to several industries in the region. One of the most frustrating cases is with cryptocurrencies as governments keep cracking down on the transactions and demand to know everything about them.

The issue overall

Most European states have a cryptocurrency regulation in place, which allows them to trace most payments within or outside of their borders. The regulations force the local crypto companies to disclose information about their processes, but for some reasons, many countries still deny large quantities of crypto transactions. Why is it so?

Let’s take Norway as an example. It may not be a member of the EU, but it is a very important part of the EEA. Most of the issue when it comes to blocking payments in Norway is regarding several industries within the country that are either completely restricted or very heavily regulated.

The perfect example is the country’s online gaming industry. According to www.norskecasino.casino, the primary reason why Norway has such a strict stance against crypto transactions, and why it keeps blocking them over and over is due to its regulations on the gaming industry.

Norway is notorious for having a blatant monopoly on the industry within its borders. The only companies able to provide these services are state-owned and governed.

So why did the country start blocking most of the crypto payments?

The firewall

Norway has a very strict firewall on any gaming website offering its services to the local population. Once they are noticed, they immediately get banned from the network. This used to be done by observing the citizens’ payments and where they were being directed to.

However, once cryptocurrencies got a foothold in the country, observing these transactions became either too hard or completely impossible. Norwegian citizens could now make payments on foreign gaming websites without alerting the authorities, which jeopardized the whole legislative framework.

Soon enough, the country started to indiscriminately block crypto payments inside and outside of its borders. It did indeed, work at some point, but soon enough new blockchain frameworks were created to avoid yet another firewall. It’s rumored that those firewalls and new legislative drafts, cost Norway at least a couple of million euros.

Why blocking the payments makes no sense

Norway is just one example of a European state blocking payments for cryptocurrencies or pretty much any other asset. The laws and regulations of the EU, which covers the majority of the EEA, is sufficient for preventing any money laundering or scam cases.

In Norway’s case, opening up the sphere with a regulation that allows foreign crypto transactions for the gaming industry would be much more manageable and lucrative than refraining it within the law. In fact, if Norway had actively enforced the law of making payments to these companies, at least half of its population would have a criminal record. And that’s not how you make legislation now, is it?

Overall, blocking those payments costs a country and the whole region much more, while providing only the most meager advantage in safety. It has been confirmed that most of the safety in crypto transactions comes from the capability of a crypto exchange. As long as they are given the resources and the legal tender to manage their transactions without any government interference, it will prove to provide much more safety and monetary gain for the company, customer and the country overall.

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