Cryptocurrency transfers require the implementation of FATF standards

G20 members issued a joint statement urging member countries to implement FATF standards on cryptocurrencies. It was published following a Summit held this weekend in Riyadh, the capital of Saudi Arabia.

“We ask countries to implement the recently adopted Financial Action Task Force (FATF) standards on virtual assets and associated providers.”

The statement refers to a set of recommendations completed in the summer of 2019, which impose a number of responsibilities on so-called virtual asset service providers (VASPs).

These recommendations include the “travel rule”, which requires exchanges and wallet providers to share user information each time funds are transferred.

This action aims to prevent money laundering and terrorist financing in cryptocurrencies. It also has the role of identifying those who are trying to avoid regulatory measures regarding cryptocurrency transfers.

The G20 group of countries has assumed the implementation of the new FATF rules in July 2019.
Since then, several countries have imposed new regulations on the crypto market. For example, Singapore and South Korea have adopted expanded VASP legislation, based on the new anti-money laundering legal framework.

Cryptocurrency transfers in the EU

The European Union has also adopted the Fifth Money Laundering Directive (AMLD5) this year. AMLD5 requires crypto exchanges to register with local regulatory authorities and comply with the new FATF rules.

FATF rules and recommendations allow authorities to make interpretations in accordance with local law. Although not mandatory, countries that do not adopt FATF recommendations are at risk restricted in terms of world trade and investment.

In addition to cryptocurrency regulations, G20 members reiterated the need for studies on stable currencies. Initially published in October 2019, the statement on stable currencies underscores the need for a global money transfer solution.

The press release after the summit calls on the authorities to assist the Financial Stability Committee (FSB). FSB monitors how vulnerable the global financial system is, while also offering recommendations on global cryptocurrency regulations.