This is worse than many people think.
There will be blacklist of "non-compliant" entities. So moving company outside of EU won't work.
If actors like coinbase,kraken and binance want to keep their SEPA FIAT EUR gateways, they'll have to comply.
This is an attempt to convert cryptocurrency system into Banking like system where every party of the transfer is known.
If that goes through and gets implemented, it's pretty much the end of crypto and many fundamentals it's based on such as 'not-my-keys-not-my-coins'
I'm confident that that is PRECISELY what a world under the CBDC-system will look like. There is a saying that "if you control a nation-state's money, you control the nation". That's where the real power resides. Bitcoin's underlying nature takes away some of that power. The government's response is to make criminals out of you. OK, but I'm also very confident that some users would rather be "criminals" than give back some of the freedom that they have won back through Bitcoin.