The G20 countries have called for “full, effective and swift implementation” of the cryptocurrency guidelines set out by the global money-laundering watchdog the Financial Action Task Force (FATF) last month. The new guidelines will require cryptocurrency-handling organizations in member countries to verify the identity of anyone depositing or withdrawing cryptocurrency over $1,000 in value, a move that could spell the end for many smaller exchanges and drive illegal activity further underground.
FATF delivered on its commitment to member governments, the #G20, and the private sector, to develop and clarify the FATF’s requirement regarding #virtualasset ➡️https://t.co/6iLwGYfheQ pic.twitter.com/THZiWQcziy
— FATF (@FATFNews) June 28, 2019
FATF Regulations Incoming
In their closing statement, it was perhaps telling that only three paragraphs of the G20 Osaka leaders’ declaration was given over to the subject of cryptocurrencies, with the key comments centering around the new FATF regulations, which the group sees as a crucial step in the battle against illegal use of cryptocurrencies:
We welcome the United Nations Security Council Resolution 2462, which stresses the essential role of the FATF in setting global standards for preventing and combatting money laundering, terrorist financing and proliferation financing. We reiterate our strong commitment to step up efforts to fight these threats, including by strengthening the FATF’s global network of regional bodies. We call for the full, effective and swift implementation of the FATF Standards.
The implementation of these regulations is likely to be a difficult and potentially time-consuming process which will probably lead to a level of cooperation between the major exchanges and crypto hedge funds not seen before. It will also all but eliminate the possibility for individuals to transact anonymously through major exchanges, with private transactions likely to increase and smaller, less reputable exchanges likely to flourish.
Facebook Gets a Mention in Passing
The G20 also underplayed the impact of digital assets on world financial markets:
While crypto-assets do not pose a threat to global financial stability at this point, we are closely monitoring developments and remain vigilant to existing and emerging risks.
This is in stark contrast to the persistent negativity put about by the international press, particularly in their stinging rebukes of the new Facebook token, Libra, which they explicitly accused of posing a threat to global financial stability. Interestingly, the declaration does reference the incoming Libra platform when discussing bringing the ‘unbanked’ into the financial system, stating that the G20 will “welcome private sector participation and transparency in these areas”. ‘Transparency’ is clearly the key word here, and one that will likely be of huge importance as regulatory discussions over Facebook’s platform begin later this year.