The European Council, the EU institution that defines the general political direction and priorities of the EU, has announced that it will propose rules for virtual currency exchanges and wallet providers operating in the bloc by June, CoinDesk reported.

According to a press release dated 12 February, the Council noted the progress made by the UN, Europol, the Financial Action Task Force (FATF), the Global Counter-Terrorism Forum, the Global Coalition to Counter ISIL and other international bodies in combating the financing of terrorism and welcomes the European Commission's action plan to strengthen the fight against the financing of terrorism.

Moreover, it underscores the importance of achieving “rapid progress on legislative actions” identified by the Commission, in particular in, but not limited to:

• the field of virtual currencies,
• the strengthening of the access to information, such as access to bank and payment account information, by Financial Intelligence Units (FIUs),
• appropriate measures on pre-paid instruments, and
• measures against illicit cash movements;

The Council invites the Commission to report to it the progress made in the implementation of its 'Action Plan', starting in June and at least every six months thereafter.

"By June at the latest we will propose measures to...have better control of payment forms such as virtual currencies and anonymous pre-paid cards”, CoinDesk quoted Valdis Dombrovskis, Vice President for the Euro and Social Dialogue.

He also said the Commission is preparing to monitor and potentially prohibit transactions from "high-risk countries" that enter the EU, and that it will come up with an ‘EU blacklist’ of such countries in June.

Earlier this month, the European Commission revealed its action plan to strengthen the fight against terrorist financing which includes raising the standards for digital currency exchanges. The fact sheet said that “the Commission will examine the possibility of applying the licensing and supervision rules of the Payment Services Directive (PSD) to virtual currency exchange platforms, as well as virtual "wallet providers".

Virtual currency businesses in the common currency bloc came under fire recently, following the terrorist attacks in Paris. While it was being widely believed that the ISIS used bitcoin to fund its operations, the EU law enforcement agency Europol said in a report that it did not find any evidence that links the ISIS to the use of bitcoin or other alternative digital currencies.