A group of international financial institutions and regulators have begun talks to discuss the regulatory landscape that will form the G20 countries’ policies on cryptocurrencies.
Led by the Financial Action Task Force (FATF), a G7 initiative to develop anti-money laundering and other financial crime policies, this week’s plenary hearings in Orlando, Florida also include testimony from the International Monetary Fund (IMF), United Nations (UN) and the World Bank.
Protecting the Financial System
During six days of meetings, a range of important issues will be discussed, “focused on protecting the integrity of the financial system and contributing to global safety and security”, a FATF statement said.
It added:
This includes further progress in the regulation of virtual assets, with strong support from the G20.
The FATF said that its president Marshall Billingslea, who also serves as U.S, Assistant Secretary of the Treasury for Terrorist Financing, will hold a press conference on the outcome of this week’s discussions on Friday, June 21.
Guidance on Virtual Assets
Among the topics on the agenda this week is the “Interpretive Note and Guidance on Virtual Assets”, a long-awaited document on cryptocurrency regulation that is expected to be formally adopted by all 38 FATF member countries. This document is expected to be published at the end of the plenary sessions on Friday.
The G20 has also added its support to the FATF’s efforts, issuing a statement earlier this month at the finance ministers and central bank governors meeting, saying it reaffirmed its commitment to “applying the recently amended FATF standards to virtual assets and related providers for anti-money laundering (AML) and combating the funding of terrorism (CFT)”.
It added in its statement of June 9:
While crypto-assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, AML and CFT.
FATF Recommendations
Among the recommendations, crypto exchanges and wallet providers will be required to be registered and licensed and subject to regular monitoring and reporting.
Domestic regulators must ensure that virtual asset service providers (VASPs) obtain and hold required originator information and details on virtual asset transfers and make it available on request to appropriate authorities.
The latter of these recommendations has provoked criticism from some crypto-industry insiders, who say that to identify customers and the recipients of their transfers could have a severe impact on the industry.
Jeff Horowitz, chief compliance officer at Coinbase exchange told Bloomberg:
Applying bank regulations to this industry could drive more people to conduct person-to-person transactions, which would result in less transparency for law enforcement.
