The Financial Action Task Force (FATF), whose advice is heeded by more than 200 countries, will meet in October to discuss ways to create a stronger global framework for the regulation of cryptocurrencies.
- In a report Tuesday to the G-20 finance ministers and central bank governors, the international financial watchdog said regulators need to cooperate to make measures such as the Travel Rule more effective.
- As such, the organization will work to develop an international framework for authorities to coordinate and share information about virtual asset service providers (VASPs).
- As defined by FATF, a VASP is an open-ended term for crypto exchanges and peer-to-peer services as well as wallet providers and custodians. It can also include any business that trades or transacts in digital assets.
- This would make the global regulation of cryptocurrencies and stablecoins, in particular, more effective, FATF said.
- The end goal would be the framework forming the base of a global network of supervisors for the crypto industry.
- While details are currently sparse, an FATF spokesperson confirmed the watchdog would convene this autumn to discuss how to improve international cooperation.
- FATF is also planning to make available a list of red flags indicating possible criminal activity to regulators at the same time.
- Siân Jones, a senior partner at XReg Consulting, told CoinDesk the framework would help regulators get up to the same speed worldwide.
- The report gives an overview of stablecoins, cryptocurrencies that attempt to offer price stability by being pegged to a reserve currency such as the U.S. dollar. FATF said it will be providing guidance for regulators at some future point.
UPDATE (July 7, 16:55 UTC): This article has been updated to include comment from Siân Jones.