FATF publishes deployment guidelines for digital identity systems

The FATF has published a draft guide for implementing digital identity systems. The guide also deals with the work of cryptocurrency and blockchain companies.

Money Laundering Financial Action Task Force (FATF) Draft Guidelines
Digital Identification for Governments, Regulatory Entities and Other Stakeholders to Enforce Anti-Money Laundering (AML) and Counter Terrorism Financing (CFT) Rules.

According to the manual, the intergovernmental organization seeks to solve the emerging problems of security and transparency as the process of financial transactions more and more goes into the digital sphere. On its website, the FATF listed a number of key issues asking stakeholders to provide email feedback by November 29, 2019.

These issues include the specific risks that digital identification may pose to enforce AML / CFT laws, how technology can help expand access to financial services, how the system can help monitor transactions, and the potential impact on FATF compliance requirements. accounting.

In particular, the guide talks about distributed ledger technology (DLT) as a tool that can help grow digital identity networks. In its leadership, the FATF called on authorities to “develop clear guidelines or regulations to properly use independent digital identification systems by organizations regulated for AML / CFT.”

Meanwhile, the FATF offers regulated institutions, such as cryptocurrency exchanges, “to use an informed approach based on risk assessment in the case of the deployment of digital identification systems for the proper verification of customers”.

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The 77-page draft guide details many of the issues associated with digital identification systems, including their reliability and independence, and how they can be used to conduct customer due diligence. The draft guide was created as part of the FATF’s efforts to combat money laundering and terrorist financing in connection with growth
the use of stablecoins in international financial systems.

The organization also emphasized the importance of digital identification in payment systems, and the possibility of using technology to identify stakeholders in stablecoin transactions.

In June, the FATF Group published
The final version of the recommendations on the regulation of cryptocurrencies and the activities of cryptocurrency services operators. Recall that the final version of the recommendations requires cryptocurrency exchanges to exchange information about customers.