FATF to Publish Revised Guidelines For Virtual Assets Service Providers

The Financial Action Task Force is all set to publish updated guidelines on virtual assets on October 28, 2021. 

Virtual assets (VAs) are advancing at a bewildering speed, indicating the need for continuous monitoring between the public and private sectors. To address the emerging issues, the FATF published “Guidance for a Risk-Based Approach to VA & VASPs” in 2019, and then FATF revised standards following a year-long review in June 2020. 

After the 2020 review, FATF consulted the public in March-April and finalized the 2021 “Guidance for a Risk-Based Approach to VA & VASPs.” The review will cover areas requiring advanced FATF guidance in order to present a clear perspective on the revised FATF standards. 

Hence, the FATF has amended its 2020 guidance and the updated guidelines will be published on October 28, 2021, which “explains how the FATF recommendations apply to virtual assets and services”. 

 The FATF virtual assets 2021 guidance details will clarify the following aspects:

1. VA’s travel rule 
2. Definition of Virtual Assets & VASPs 
3. The role of VASP supervisors 
4. VASPs licensing and registration guidelines
5. Risks associated with peer-to-peer (P2P) transactions 
6. How countries must apply FATF standards to stable coins
7. Tools to identify and combat the risks of P2P transactions

The revised update is rolling out tomorrow (28th October 2021) is thought to assist the public and private sector in implementing FATF standards accordingly. Accordingly, the FATF stated, “Keeping in view the updated guidance, FATF expects the public and the private sectors to implement the FATF VA/VASPs standard as soon as possible.”

The Paris-based global watchdog is ought to closely monitor any further revision required to enhance the implementation of the FATF standard on virtual assets and virtual asset service providers. “This includes in relation to areas such as stablecoins, peer-to-peer, non-fungible tokens and decentralized finance.” 

Suggested Read: FATF’s Travel Rule: A New Dawn of Regulations for Virtual Asset Services