Members of the European Parliament (MEP) have published a new draft legislation which details how they seek to regulate digital currencies and prevent the use of financial system for money laundering and terrorism financing purposes.

The MEPs are particularly interested in empowering financial watchdogs in the common currency area to collect more information on digital currency users.

“To combat the risks related to the anonymity, national Financial Intelligence Units (FIUs) should be able to associate virtual currency addresses to the identity of the owner of virtual currencies. In addition, the possibility to allow users to self-declare to designated authorities on a voluntary basis should be further assessed.”

Prepared by the EU Parliament Committee on Economic and Monetary Affairs, the Committee on Civil Liberties, Justice and Home Affairs, the draft at one point goes on say that “virtual currencies should not be anonymous”. It urges member states to ensure a more efficient and coordinated approach to deal with financial investigations, including those related to the misuse of virtual currencies, into terrorism.

According to CoinDesk, if the legislation is finalized and approved, it would facilitate sharing of information received by the national-level financial intelligence units.

In May 2016, the European Parliament gave a nod to the setting up of a taskforce to monitor virtual currencies, like Bitcoin, to prevent their use for money laundering and terrorism financing purposes. Later in July, the European Commission, the executive arm of the European Union, adopted a proposal to further reinforce EU rules on anti-money laundering (AML) to counter terrorist financing and increase transparency. The Commission had proposed to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive.