Japan is planning a new global cryptocurrency system designed to replace SWIFT, the platform designed to send remittance payments anywhere in the world using fiat currencies.
Will SWIFT be a Thing of the Past?
Allegedly, the platform is already underway and could be ready within the next few years. To an extent, this isn’t particularly surprising. After all, Japan is a leader when it comes to cryptocurrency regulation following the fiascos of Mt. Gox in 2014 and Coincheck in 2018. Both incidents saw several hundred million dollars stolen in BTC or other crypto which when combined, accounted for losses surpassing $1 billion.
Since Coincheck occurred 1.5 years ago, Japan has gotten the country’s Financial Services Agency (FSA) involved in managing crypto systems throughout the nation. The FSA began examining crypto exchanges, for example, and reporting on their safety protocols. Any that didn’t meet present expectations were sent a dire warning letter explaining it was either time to fix up or leave the space.
At press time, however, the plans for Japan’s SWIFT replacement haven’t been made public, and it’s not entirely understood how the country is looking to initiate such a system at this time. However, it has been stated that Japan is looking to “share” the enterprise with other nations while also attaining their help in its development and distribution.
The proposal for the SWIFT replacement was approved by the FSA just last month. It’s operations and dealings will be overseen by an agency described as “similar with the Financial Action Task Force (FATF).” While regulators are hoping the system will potentially spike interest in crypto, they are also hoping it provides them with a way to further monitor crypto activity and put an end to illicit maneuvers such as money laundering.
How Serious Is Crypto-Related Crime?
It is not entirely clear how the platform will operate at this time. It’s also being suggested that the system is designed not so much for remittance payments and replacing SWIFT, but simply as a means of monitoring every crypto transaction that occurs in Japan. For this to occur, however, every single exchange within Japan’s borders will need to cooperate in the program, which isn’t terribly likely. Thus, the idea that Japanese legislators will see everything that goes on in the space is being labeled as somewhat unrealistic.
It seems everyone is worried about the alleged criminal activity cryptocurrencies can attract as of late, even though it’s been suggested that laundering fiat is much easier than laundering crypto. For example, U.S. President Donald Trump recently issued a series of negative tweets about crypto, saying that they “weren’t money,” that their values were “based on thin air,” and that they were magnets for illegal activities such as money laundering and assorted drug transactions.