Saturday, January 25, 2020

G20 Countries Agree to FATF-Standard Digital Assets Regulation

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Adedamola Bada
I'm Damola, a computer engineer from Obafemi Awolowo University. A crypto enthusiast, marketer, and writer who is seeking to achieve career excellence through hard work and positive contribution to the organization that aspires for excellence. Contact me on damolabada@gmail.com

The G20 Countries which includes Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States have signed to law a pronouncement to regulate digital currency and counter its use for money laundering and embezzlement.

According to a Saudi Gazette report, the declaration was signed in Buenos Aires, the capital city of Argentina, and it includes promises from each of the sovereign states to counter the use of digital currency for funding terrorism in line with the Financial Action Task Force (FATF) standards.

FATF

Declaration on Crypto Regulation by the G20

Section 25 of the declaration signed by the G20 Countries states that;

“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards, and we will consider other responses as needed.”

The Organisation for Economic Co-operation and Development (OECD) created the Financial Action Task Force (FATF) in order to combat money embezzlement and funding and backing of terrorists. Earlier in the year, the FATF started deliberations about creating standards to regulate cryptocurrency all over the world and had also considered revising the current rules so the cryptocurrency market could fully fit into its line of regulations.

The G20 declaration basically indicates that “other responses” would be considered as needed, including the fact that the G20 would continue its observation of the world economy which has experienced mass digitalization in the past few years. The declaration also added that it “would seek a consensus-based solution to address the impacts of the digitization of the economy on the international tax system with an update in 2019 and a final report in 2020.”

In July of this year, the G20 made a statement to the media that it was looking to regulate cryptocurrency by applying anti-money-laundering and Know Your Customer (KYC) standards in October. In the statement, the G20 indicated that all they were looking to do was to simply observe the cryptocurrency industry and further said that cryptocurrency presents no risk to traditional finance.

The Financial Stability Board (FSB), headed by Mark Carney, Governor of the Bank of England which also serves as the G20’s regulator, was commissioned to develop an outline to observe the cryptocurrency industry. Mark Caney is known for strictly monitoring cryptocurrency markets. The FSB published a set of metrics that it would use to govern the crypto market in order to allow for its stability. The outline for observing the crypto market was developed by both the FSB and the Committee on Payments and Market Infrastructures.

The outline by the FSB states that its objective is to look out for anything that could threaten to destabilize the cryptocurrency market and that they aimed to remove risks with data pulled from public sources.

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