09 Jul 2020
Tether and other so-called cryptocurrency stablecoins have long flown under the radar of international regulators. That’s about to change.
The Financial Action Task Force, with members from about 200 countries who recommend ways to stop money laundering and the financing of terrorism, said in a report Tuesday that stablecoins need to comply with standards to guard against both practices.
That means that exchanges and other entities supporting them will likely have to verify their users’ identities and comply with other policies on virtual assets such as Bitcoin that FATF set forth last year. The FATF report was prepared for G-20 finance ministers and central bank governors after the completion of a 12-month review.
“My assumption would be that FATF will update guidance in relations to stablecoins in the near future,” said Jesse Spiro, global head of policy and regulatory affairs for compliance technology provider Chainalysis.
The new rules would also impose anti-money-laundering and know-your-customer requirements on stablecoin issuers like Tether as well as new endeavors such as Libra, an association started by Facebook Inc. to develop global stablecoins. Stablecoin providers, as well as exchanges that support the coins, would have to set up processes for monitoring transactions, investigations and regulatory filings. They’d also have to make sure that over-the-counter trading desks, which often buy stablecoins for clients, are compliant, Spiro said.
By Olga Kharif, Bloomberg, 7 July 2020
Read more at Bloomberg
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