FATF calls stablecoins a global risk and explained that they increase the money laundering concerns and are usually included in terrorist financing as per the coming altcoin news that we have today.
In the documents released after the latest meeting, the intergovernmental organization FATF calls cryptocurrencies and stablecoins as a major strategic initiative and explained that cryptos that have their value pegged to fiat currencies could have a huge impact. About 800 representatives from 205 jurisdictions met from October 16 and discussed various issues under the jurisdiction of FATF led by Xiangmin Liu of China according to the publication. The Crypto-related concerns were center and front. The document addressed cryptocurrencies broadly, it singled out stablecoins on multiple occasions:
“Emerging assets such as so-called global ‘stablecoins’, and their proposed global networks and platforms, could potentially cause a shift in the virtual asset ecosystem and have implications for the money laundering and terrorist financing risks. There are two concerns: mass-market adoption of virtual assets and person-to-person transfers, without the need for a regulated intermediary. Together these changes could have serious consequences for our ability to detect and prevent money laundering and terrorist financing.”
Another document titled ‘’Money laundering risks from stablecoins and other emerging assets’’ said that the FATF will continue to examine the characteristics and risks of stablecoins and may even clarify the update of virtual currency guidance to better address this class of digital assets:
“The FATF will continue to ensure its standards remain relevant and responsive and it will report to G20 Finance Ministers and Central Bank Governors in 2020 on the risks from global ‘stablecoins’ and other emerging assets.’’
The FATF’s warning came after a report from the Group of Seven (G7) advanced economies and the Bank of International Settlements calling stablecoins a growing threat to the monetary policies and the financial stability and competition. The FATF determined how it would evaluate the implementation of the last guidance by the countries on digital assets and will add this process to the current mutual evaluation procedure. The FATF called on national financial services back in June that the regulators should implement strict know-your-client requirements and to require exchanges and wallet providers to hold KYC information for recipients of transactions.
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