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Cryptocurrencies

FATF, G20 discuss about security of digital asset transactions

Monday 24 June 2019 | 01:24 PM CET

The Financial Action Task Force (FATF) has released a new guidance paper covering digital assets and digital asset service providers, G20 following this initiative.

The guidance paper will become part of the FATF Standards, which most of the world's major financial centers abide by. FATF’s provisions for increasing scrutiny of digital asset transactions require a level of information collection, for the purposes of AML and counter-terrorism financing (CTF).

Entities ranging from digital asset exchanges through to fund managers will be asked to collect information about customers initiating transactions of over USD 1,000 or EUR 1,000, and information about their recipients. They will also be required to send that data to the transaction recipient's service provider along with each transaction.

G20 finance ministers from around the world also met, aiming to discuss their commitment to providing for growth whilst preventing downside risk. A communique released identified ‘crypto-assets’ as a technological innovation that could bring potential benefits to the financial system and broader economy. Included in this acknowledgement was also a reaffirming of their commitment to applying FATF Standards to virtual assets.

However, immediate reactions from many in the industry have centered around concerns that the implementation of such requirements would be costly and technologically challenging. Such measures may unnecessarily go against the very nature of digital assets by placing overly burdensome restrictions on an industry which – as the G20 noted in its communique – does not currently pose a threat to global financial stability.

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