Europe weaves a regulatory network of total surveillance over bitcoin and cryptocurrencies.
Spain leads offensive against privacy, tracking satoshis in each wallet.
Bitcoin (BTC), the digital asset that millions embraced to regain control of their finances, using decentralization as a shield and encryption as a strength, now finds itself facing a sophisticated European regulatory tangle. The expectation is palpable. What started as a mere stripping away of cryptocurrencies’ privacy has escalated rapidly.
Today, the regulatory microscope falls on every satoshi (the smallest unit of bitcoin) in self-custody wallets. Also about every digital handshake in P2P transactions. That’s because Europe is developing total financial surveillance, and with it, digital anonymity appears to be a definitive relic of the past.
Spain, through its tax agency, leads this global offensive against privacy. With the wealth tax and, crucially, Model 721, forces declaration of all bitcoin and cryptocurrency holdings. This obligation applies to both national and foreign assets that exceed 50,000 euros, marking a key point in fiscal control.
“In the event of an inspection, the Treasury, through a request, can request the CEX (centralized cryptocurrency exchange) to provide all the information it needs about your crypto operation,” says Esteban Rivero, known on the social network x as Zero One and specialist in tax issues. He sees it as an “information gap” that gives the agency a full view of users’ digital assets.
But the most forceful blow is yet to come. Approved in October 2025 as part of the Tax Fraud Prevention Law, a new regulation is about to be approved. And with that, will give the Treasury new tools for the effective control, tracking and monitoring of digital assetsequating them to other goods and improving cooperation to avoid tax evasion.
In that sense, starting in 2026, the Spanish agency will have new powers to directly track, seize and confiscate bitcoin and cryptocurrencies from tax debtors without the need for a prior court order.
This mechanism, which is already being tested in cases of flagrant evasion, transforms the nature of self-custody. This is because, although the private keys belong to the users, the state will have the master key to intervene in their funds if it detects a debt.
This key is access to metadata, because even if they do not control the private keys, they can apply legal pressure with fines of up to 150% of the evaded value or use stablecoins, such as tether (USDT) that allow the freezing of funds by fiscal order.
A panopticon for perfect surveillance in Europe
This European regulatory offensive dangerously evokes philosopher Jeremy Bentham’s vision of the 18th-century panopticon. That prison architecture, designed for the constant and hidden observation of the prisoners, sought to induce self-surveillance that would normalize their behavior.
Today, the digital prison is expanding. The thicket of European regulations—MiCA, DAC8, EUDI (European Digital Identity)—does not build physical walls, but rather a total financial surveillance system that places bitcoin users in a virtual panopticon.
Although we are not aware of every glance, the mere possibility of absolute surveillance of our self-custody wallets and P2P transactions look for precisely that. That is, modifying our behavior, eradicating digital anonymity and blurring the already fragile barrier between the public and the private in the information age.
In fact, the vision of comprehensive surveillance transcends the purely fiscal. At the World Economic Forum in Davos in January 2025, Spanish Prime Minister Pedro Sánchez advocated linking social media accounts to the EU Digital Identity Wallet (EUDI) to eliminate online anonymity.
“We cannot allow someone, protected by anonymity, to damage our democratic debate and our coexistence,” declared Sánchez, comparing digital anonymity to “wearing a mask on the street.”
This proposal, which is aligned with the eIDAS 2.0 Regulation (electronic identification means notification system) creates a biometric identity infrastructure. This, in practice, can be interconnected with tax reporting systems.
The synergy is powerful, because a bitcoin and cryptocurrency wallet linked, directly or indirectly, to a verified digital identity could activate automatic alerts at the State Tax Administration Agency (AEAT), closing the circle of high traceability.
Although EUDI is theoretically voluntary until 2027, its potential link to essential public services makes it an almost mandatory tool for adoption.
A bitcoiner’s warning
This regulatory offensive is not going unnoticed, according to what was reported by CriptoNoticias. Alejandra Guajardo, known as Miss Bitcoin from El Salvador, launched a forceful alert in a video from November 12, 2025. “What we are seeing in Europe is a declared war against bitcoin savers,” just like this medium.
In that way, Guajardo connects the dots between Spanish politics and measures such as the amendment to the Finance Bill 2026 in France, which taxes holdings of digital assets at 1% exceeding 2 million euros, classifying it as “unproductive wealth.”
«The fiat system is based on debt. “If the debt stops, there is not enough money to cover it, which is why there is so much hostility against bitcoin as a store of value,” said Guajardo.
Guajardo urges users to migrate toward self-custody or consider friendlier jurisdictions like El Salvador or Panama. His message resonates in the face of the coordinated assault on privacy and financial sovereignty.
In any case, bitcoin is not a privacy currency, so self-custodied wallets, without interaction with regulated exchanges, remain viable without immediate reports, as long as they are not used for transactions.
The digital euro, the gravedigger of privacy in Europe
Additionally, the digital euro—in an advanced stage of development by the European Central Bank (ECB)—could be consolidated as the definitive architecture of financial surveillance in Europe. This digital currency, inherently traceable, would transform each transaction into a record accessible to authorities and banking entities, eroding the barriers between finance and state control.
In this way, the digital euro stands as the final nail in the coffin of privacy, paving the way for an ecosystem where money is earned as an instrument of social engineering.
As analyst Marc Vidal warns, this project is presented as a bastion of continental protection, but in reality confers disproportionate power on its custodiansenabling them to shape and limit the everyday choices of citizens.
The irony is that, under the pretext of European sovereignty, Europeans risk giving up control over their most intimate financial decisions. Vidal goes even deeper by equating the digital euro with “a Trojan horse”: a façade of modern innovation that conceals gears of omnipresent monitoring.
This threat is exacerbated by the decline of cash, which would deprive individuals of protection against blockades arbitrary accounting or selective limitations.
The curious thing is that, in the face of such a scenario, bitcoin is the asset that emerges as an essential counterweight. Its decentralized and censorship-resistant essence positions it as the last bastion to safeguard financial autonomy. This in a regime of systemic surveillance where each economic movement nourishes the digital portrait of a citizen under perpetual scrutiny.
Faced with this Orwellian panorama, communities like Cuba Bitcoin demonstrate in practice how Bitcoin technology can become a shield against oppressive financial systems.
Javier Forte, founder of the community, expresses it crudely. He points out that “in Cuba we have a bitcoin bank and we want to export it to Latin America.” Its ecosystem—which integrates Lightning nodes, Cashu with blind signatures for privacy, and La Chispa as an accessible interface—works where the state tracks every movement.
Voices of an anti-privacy trend
Eli Nagar, CEO of Braiins Mining, warns that “the EU will ban anonymous cryptocurrency accounts by July 2027. Any transaction over 1,000 euros will need your ID. Privacy is extinguished.
DegenAgainstTheMachine, an analyst of the cryptocurrency ecosystem since 2017, criticizes the sharing of bitcoin and cryptocurrency wallet addresses that have been “doxed.” That is, whose identity of the owner is already public, “is a recipe for disaster.” For him it is like making all banking transactions public. «Without privacy, there is no crypto adoption; The EU hinders innovation.
Christine Anderson, Member of the European Parliament, denounced that the EU Commission “plans to weaken consumer protection with the ‘digital wallet'”, opening doors to over-identification and a data monster to monitor citizens and facilitate repression.
At the intersection between innovation and control, Europe forces us to choose: do we hand over financial sovereignty to a digital panopticon, or do we resist with tools such as self-custody and security protocols? zero knowledge that preserve the ethos of Bitcoin?
The trend is clear—surveillance advances inexorably. But the history of decentralized money teaches us that regulation does not kill freedom, but rather redefines it.
For European bitcoiners, the challenge is not to flee, but protect data and push for laws that balance security with privacy. And with Satoshi Nakamoto in mind, we must remember that the future of financial freedom is written in code, not in decrees.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.