The Financial Action Task Force (FATF) believes that regulating cryptocurrency will ultimately increase trust in the blockchain technology.
According to the money laundering watchdog, this will instill confidence in the technology “as the backbone behind a robust and viable means to transfer value”.
This was noted in the Financial Action Task Force Supervisors Forum to discuss how to regulate crypto assets and virtual assets service providers (VASP).
The forum was held in France with 135 representatives from 50 delegations involved in crypto supervision in attendance.
The forum aim was “to promote more effective supervision by national authorities”. It examined three areas in the meeting where they laid emphasis on advantage of cooperation internationally because crypto assets are borderless.
Areas of Interest
One of the areas of interest focussed on during the forum was the lessons learned so far by countries who already have their regulatory framework for virtual assets and providers set up.
The Supervisor forum also discussed issues encountered when coming up with virtual assets service provider laws and regulations.
Attendees poured their knowledge and approaches in developing AML regulations for VASPs in their various regions and how they were implementing the FATF recommendations.
The third item of the discussion centered around the tools, skills, procedures and technology that are needed to effectively supervise VASPs.
FATF’s focus on crypto assets seeks to prevent financial crimes as well terrorist financing. Crypto assets as global products poses unique features that can be utilized to finance crimes globally.
Therefore, adopting its rules will “ensure transparency of virtual asset transactions and keep funds with links to crime and terrorism out of the cryptosphere.”
It has identified several areas that require further actions and had scheduled by mid, 2020 for its next session where it will discuss further.
Challenges to Implementation
According to the forum, there are challenges to the implementation of FATF by countries but the forum is beginning to develop a global knowledge base on what works in crypto assets supervision.
And it believes that “it will ultimately increase trust in blockchain technology as the backbone behind a robust and viable means to transfer value.”