The obligations imposed on CASPs conflict with the rise of open-source technologies like the Lightning Network, Fedimint, and e-cash, which are permissionless, censorship-resistant, and provide strong privacy guarantees. These rapidly growing technologies are reshaping global transaction patterns, and by rejecting such transactions, EU-based CASPs risk losing market share and being outcompeted by non-European rivals operating under less restrictive frameworks. This regulatory approach may marginalise EU CASPs, pushing users toward unregulated alternatives outside the EU, thereby undermining the effectiveness of the AML/CFT framework. The result is not only a failure to meet regulatory objectives but also a weakening of the EU’s digital economy, innovation capacity, and global competitiveness in financial services.