The Financial Action Task Force (FATF) has recently reported that it will be launching its guideline for crypto industry regulations within the first half of 2019.
Cryptocurrency adoption definitely seems to be on the rise. More and more retailers are starting to accept virtual currencies leaving regulators scrambling to develop and implement suitable regulations.
When it comes to these guidelines, the elimination of fraud seems to be a driving factor. Both the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) are actively working towards eradicating fraudulent platforms and making the cryptocurrency market safer for consumers.
A Global Solution for Regulations
One authority that is hoping to put pen to paper when it comes to legislation is the Financial Action Task Force (FATF). According to Reuters, the Paris-based global watchdog for money laundering will be creating its cryptocurrency guidelines by June next year.
Jurisdictions all over the world will need to adhere to certain processes including licensing and regulating crypto exchanges and even some digital wallet platforms. This also applies to platforms that are launching ICOs. While the FATF is aware that virtual assets can “spur financial innovation and efficiency and improve financial inclusion”, the authority also notes that the industry can be used as a money-laundering medium for criminals.
— FATF (@FATFNews) October 19, 2018
The hope is that clear virtual asset regulation would reduce these risks. While it may appear that more policing of the industry is negative, the fact that there are discussions and deadlines in place shows that authorities all over the world are taking the crypto market seriously, which bodes well for its future. Any attempt to make the system more secure for consumers would lead one to believe that digital currencies are here to stay.
This global effort by the FATF could be just what is needed to tie together existing regulations that are implemented in different countries. The authority’s president, Marshall Billingslea, has said that the group would be monitoring the countries that implement the new system. Those that are seen to have not adopted the new policies to the FATF’s standards will be at risk for placement on the authority’s blacklist.
By June, we will issue additional instructions on the standards and how we expect them to be enforced.
Impact on Other Countries
There’s no way yet to determine how these FATF regulations will impact existing guidelines in other countries. For example, Malta has already drafted legislation, albeit more focused on blockchain technology. The island nation is also assisting Vanuatu in creating the same.
While some countries are supporting the industry, others like China have clamped down hard. Even India with its unclear regulations has banned its banks from dealing with crypto. Only time will tell if this global approach to regulations will be adhered to and if it will be successful.
Do you think that the FATF’s approach will be a success? Let us know in the comments below!
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