Some further clarity for regulation in the cryptocurrency could be the result of the Financial Action Task Force’s (FATF) next publication scheduled for 21 June.
The regulations, targeting cryptocurrency exchanges, custodians, wallets and cryptocurrency-related businesses, are continually being monitored by the FATF, but this next publication has some virtual asset service providers wondering what to expect.
The objectives of the inter-governmental FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. Such is the nature of the debate surrounding whether cryptocurrency should or should not be allowed to become embedded in the global financial environment, many task forces are currently examining where to go next when it comes to regulation.
Recently the Swiss-based FSB’s “Crypto-assets work underway, regulatory approaches and potential gaps report,” urged the G20 to keep the question of more coordination between international financial standard setters under review. The issue which most other groups tasked with cryptocurrency regulation are coming across is that members hold quite different views about how to move forward with cryptocurrency regulation.
One industry leader, exchange giant Coinbase, is keen to see the outcome of the 21 June announcement. Coinbase chief compliance officer Jeff Horowitz is hoping for a measured approach as he feels that heavy-handedness by the FATF may be a counterproductive measure. He argues:
“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,” adding “The FATF really needs to consider the many unintended consequences of applying this specific rule to VASPs.”
Coinbase will not be alone in awaiting to examine what the next step in the regulatory process offers the industry on June 21.
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