Financial Action Task Force to Create Binding Crypto Rules for G20 Nations

The Financial Action Task Force (FATF) is going to announce its new rules for cryptocurrency in June 2018. In March 2018, the G20 said they looked forward to the FATF’s review of cryptocurrency activity and committed to implement the cryptocurrency standards the FATF decides upon, and call upon the FATF to advance global adoption of cryptocurrency.

A Japanese official said the FATF would begin its cryptocurrency discussion and rule-making session on 24 June 2018. The hope is to have binding rules for cryptocurrency exchanges in place no later than 2019, in order to reduce money laundering and terrorism financing that is being facilitated with cryptocurrency.

The rules announced by FATF will have wide-reaching implications for cryptocurrency markets and activity, since the G20 includes representatives from the governments and central banks of the most powerful and industrialized economies on the planet including the United States, European Union, United Kingdom, Russia, South Korea, South Africa, Saudi Arabia, Mexico, Japan, India, Indonesia, Turkey, China, Canada, Brazil, Argentina and Australia.

In 2015, FATF released a 48-page document to give member nations guidance on how to treat cryptocurrency in order to reduce money laundering, including registering cryptocurrency exchanges, collecting identification information of exchange users, and reporting suspicious activity. However, this guidance was non-binding, and it was left up to each nation’s discretion on what they should do to handle cryptocurrency activity.

FATF will analyze the effectiveness of the 2015 guidelines, discuss how to improve the guidelines especially when considering new technology that has been developed in the meantime, and how to deal with nations like India and China that have outright banned cryptocurrency trading.

IT could get China and India to legalize cryptocurrency trading according to new binding guidelines. Japan hopes to lead the creation of these new cryptocurrency rules issued by FATF and has been very positive towards cryptocurrency. Japan will take leadership of the G20 in 2020.

 

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