One of the challenges of any regulation of cryptocurrency is that digital assets are, by definition, borderless. This presents numerous challenges for governments across the world, and a number of recent news stories suggest a concerted move towards a unification of cryptocurrency regulation. Today’s announcement by the Financial Action Task Force (FATF) represents a big step in the direction of such regulation.
It appears that the FATF will seek to work alongside Japan to develop and implement policy across the G20 and beyond. Japan is the world’s second largest cryptocurrency market and is leading the way in the regulation of cryptocurrency exchanges. The country already has an exchange licensing scheme in place, and has made efforts to develop international consensus in terms of crypto regulation and policy.
In May, Japan’s financial services watchdog made a statement regarding organised crime groups’ use of privacy coins such as Monero for money-laundering, and made it clear that only international regulation could ensure similar abuse is prevented in future.
Today’s news puts the FATF firmly in the driving seat of new regulations which could see shared policy across Japan, the US, South Korea, Canada, the UK and an additional 30 major economies across the world. As such, any policy announced has the potential to impact significantly upon the crypto landscape. It is expected that the regulatory focus will be on crypto exchanges first and foremost, and at this stage any future policy on privacy coins is unclear.
