Contrary to what some may believe, Bitcoin was never meant to operate outside the law. In fact, when Satoshi Nakamoto first conceived it, he explicitly stated that it should be developed to adhere to financial regulations. However, there have been those who believe cryptocurrency is nothing more than a toy and have developed crypto projects that will, ultimately, be forced into oblivion for their lack of cohesion with international policies and standards. That may come sooner than anticipated, as the G20 has already stated that it would introduce crypto guidelines next month and, now, the Financial Action Task Force (FATF) is getting ready to set new international standards to regulate crypto-related companies.
The G20 has already publicly stated that it plans on following all recommendations put forth by the FATF, the international body tasked with creating and implementing policies related to financial transactions. The task force is expected to implement a “Know-Your-Customer” (KYC) strategy for crypto that is similar to fiat transactions. Exchanges and other crypto businesses will have to include customer data when transferring funds, just like is seen with transfers between bank accounts.
US Treasury Under Secretary for Terrorism and Financial Intelligence said during Consensus 2019 last week, “During its presidency of the FATF, the United States has worked with other countries to clarify how all countries should regulate and supervise activities and providers in the digital currency space. We anticipate that in June the FATF will adopt a final version of its Interpretative Note, along with updated guidance to further assist countries and industry with their obligations.”
Some within the crypto industry have argued that the move will be “too difficult” to implement. Banks probably tried to use the same argument when they were ordered to introduce the KYC policies so, to those individuals, grab a tissue and dry your tears. Everyone who legitimately understood what crypto is from the start knew this day was coming and those who aren’t willing to play by the rules should opt to get out of the game.
The good news for those procrastinators is that the changes won’t take place overnight. Countries within the G20 have to implement their own laws, but the FATF has always been the guide and the G20 countries have always followed the group’s recommendations. They almost have to – G20 guidelines allow for any country to be blacklisted if it doesn’t.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.