The most important organization that dictates laws against money laundering and financial crimes, the Financial Action Task Force (FATF) will clarify the regulatory framework that surrounds cryptocurrency at a global scale. This new set of guidelines to be released next June, and a tight legislation in every country that deals with crypto guarantee a global standard of compliance that will serve to reduce cryptocurrency related crime.
FATF Role In Lawmaking
The cryptocurrency world has been evolving since its beginnings at an accelerated rate. Due to the pseudo-anonymous trait of cryptocurrency transactions, illegal merchants and money launderers have flocked to use them to avoid detection by the authorities.
This is also easy because there is no global regulation for cryptocurrencies, and every country has its own conception of what a cryptocurrency really is. But this is where the Financial Action Task Force enters the stage.
While it is the global institution that determines the regulations for financial markets and crimes, the FATF had not issued any statement concerning cryptocurrency oversight, until now.
The FATF has announced that they will be releasing its first set on cryptocurrency guidelines the next June, a thing that will bring plenty of regulatory movement in countries that have not developed a cryptocurrency related framework. According to preliminary reports, exchanges and ICO will have to be licensed.
The organization will also require the establishment of tight anti-money laundering and know your customer policies to avoid the possible use of cryptocurrencies for illegal purposes.
This push for regulations comes in a time when cryptocurrencies are evolving from speculative market investment instruments into institutional legal tools, with the emergence of institutional grade crypto-startups like Bakkt and Fidelity in USA.
Regulating The Future
While establishing these rules the next June is a good measure, it is just the start of a long race to regulate cryptocurrencies in the whole world. This organization can only do that: establish and dictate guidelines for regulation.
It’s up to each individual country to write and pass these regulations according to their individual and particular legislative processes. That can take time and resources to complete. But the FATF can also make pressure to achieve this.
The Financial Action Task Force can add the countries that are not collaborating into a sort of blacklist that will restrict them from using the global financial system and will make them being secluded from all the international financial community.