G20 member countries have fixed an October deadline for evaluating a global anti-money laundering (AML) standards on cryptocurrencies, as stated in the document issued.
According to a document issued on 22nd July, the central bank governors and the finance ministers of the alliance congregated to reiterate their stand on ‘vigilant’ regulation of cryptocurrencies.
The members also summoned Financial Action Task Force (FATF), an intergovernmental body which deals with money laundering and terrorist financing. The body was asked to provide clarification on how it’s the existing standards can apply to cryptocurrency within a period of three months.
The Financial Action Task Force (FATF) formulates policies to combat money laundering and is planning to establish a framework for the world’s cryptocurrency exchange.
According to the report published earlier, the body will also monitor the effectiveness of the existing rules and its application to new exchanges. It would also look on the application of the newly established system on countries that have banned crypto trading.
“While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant. … We reiterate our March commitments related to the implementation of the FATF standards and we ask the FATF to clarify in October 2018 how its standards apply to crypto-assets,” the member countries stated in the document.
The members believe that the technology driving crypto-assets could deliver significant benefit to the financial system and the broader economy. However, cryptocurrencies raises issues for consumers and investor protection, integrity of market and evasion of taxes. Such currencies lack the key factors characteristics of sovereign currencies.
Initially, the alliance had asked for AML standards from the body in March in order to broaden global regulatory recommendations on the issue.
A report published in February stated that FATF would accelerate its scrutiny over digital token laundering.
Last week, Financial Stability Board which is an institution that conducts analysis and makes recommendations to the G20 on global financial systems, presented key metrics for monitoring digital assets before the members meet, iterating to the G20’s request in March.