Update (14:00 UTC, Aug. 12, 2019): The Financial Action Task Force has contacted CoinDesk by email and stated that it is not involved in developing a cryptocurrency monitoring system as reported by Nikkei Asian Review. We have added the task force’s comment below.
Fifteen nations are planning to set up a system to monitor cryptocurrency transactions, a Friday report indicates.
According to Nikkei Asian Review, the aim is to stem the movement of funds for illicit purposes, such as money laundering and funding of terrorism, by collecting and sharing transaction data, as well as the personal information of cryptocurrency users.
FATF, the international money-laundering watchdog, is claimed in the report to be managing the project, which is slated to be finalized by next year and live within several years. The 15 nations, including the G7 members, Australia and Singapore, would develop the system, says Nikkei.
However, FATF told CoinDesk after publication of this article that it is not, in fact, involved in the monitoring project. It stated via email:
“The updated FATF standards announced in June will require crypto-exchanges in all jurisdictions to identify their customers and keep that information securely and privately, so that it is available to law enforcement authorities when needed to investigate money laundering or terrorist financing. The same requirement already applies to banks and other financial institutions. The FATF does not collect customer data, and the FATF standards recognise the importance of privacy and data protection.”
The G7 group of nations warned in July that cryptocurrencies like Facebook’s Libra are a threat to global financial stability, and that that rules of the “highest” standards are needed to minimize the use of digital currencies in money laundering and funding terrorism.
FATF was also reported last month to have given its permission for Japan to lead the creation of an international cryptocurrency payments network similar to banking network SWIFT, also aimed to stem money laundering.
Bitcoin image via Shutterstock
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