The global watchdog for money laundering has announced that it will start publishing its first batch of cryptocurrency regulations by June next year.
The Financial Action Task Force (FATF) said there is a great need to implement worldwide jurisdictions for cryptocurrency regulation including the licensing and operation of cryptocurrency exchanges as well as the firms offering encrypted wallet services in an effort to curb the use of digital currencies for money laundering schemes among other crimes. The global regulations are expected to set an international standard in a world where cryptocurrencies are only subject to unreliable regulations in a few countries and non-existent to the rest.
According to the statement, the global regulations will also apply to firms that offer financial services for the issuance of initial coin offerings (ICO)
Cryptocurrencies surviving without regulations
Since their inception, cryptocurrencies have grown to defy global standards of regulations adhered to by standard currencies. Creators of these assets have insisted that their decentralized structure does not require backing from any central bank to operate as money. This has forced different governments to come up with different ways of regulating these assets as a lasting solution is still being sought. However, this has since proved a challenge as the nature of cryptocurrencies is said to be trans-boundary thus difficult to regulate in a restricted jurisdiction.
The announcement to introduce global crypto regulation framework comes after this week’s FATTF’s plenary meeting which assembled officials from 204 countries to discuss the need for crypto regulations among other issues.
Implementing the new regulations
FATF’s president Marshall Billingslea announced June as the designated date for the release of global crypto regulation after a proposal by G20 member countries eyed October 2018 as the deadline for release of a clear and regulated framework around cryptocurrencies.
“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” he said.
FATF was also called forth to explain how its Anti-Money Laundering (AML) standards will be applied to cryptocurrencies.
In its response, the FATF explained: “there is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism… As part of a staged approach, the FATF will prepare updated guidance on a risk-based approach to regulating virtual asset service providers, including their supervision and monitoring; and guidance for operational and law enforcement authorities on identifying and investigating illicit activities involving virtual assets.”
