G-20 impels countries to adopt tough FATF Regulations on Cryptocurrencies
Bankers and finance ministers in the G-20 (Group of Twenty) are urging for greater acceptance of measures that pressurize cryptocurrency exchanges to disclose user information.
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Following a summit in Riyadh last week, countries that are uncompliant of the Financial Action Task Force’s crypto guidelines were urged to strictly adhere to the regulations. “We urge countries to implement the recently adopted Financial Action Task Force (FATF) standards on virtual assets and related providers,” reads a joint-communique published after the summit.
FATF’s travel rule, which was finalized in the summer, requires virtual asset service providers (VASPs), including exchanges and wallet providers, to exchange user information with one another every time funds are transferred. This is to avert fraudsters and money launderers that use the virtual currency to by-pass existing controls and penalties. Last year G-20 reclaimed that it would comply with the new regulations.
FATF’s guidelines are un-irrevocable and give the administration some room to incorporate the new standards into the local law. But countries that deliberately fail to adopt guidelines are blacklisted, potentially inhibiting them from global trade and foreign investment.
Many of FATF’s 36 member-states, which include G-20 economies, have already embraced the new travel rule. The EU’s fifth anti-money laundering directive (5AMLD), which requires exchanges to register with local regulators and show compliance, came into force at the beginning of the year.
Realizing the need for an efficient global remittance system, G-20 ministers at the weekend restated from October calling on countries to conduct more research and risk-assessment into global stable coins or GSCs before they enter mainstream circulation.
The communique also appealed to the local authorities to help the Financial Stability Board (FSB), which monitors the vulnerability of the global financial system, in drawing up new suggestions for the global regulation of virtual currencies.