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According to the leading Asia news outlet Nikkei Asian Review, several major industrial countries have joined forces to create a new infrastructure that collects and share personal information of users who are associated with crypto transactions. The aim is to prevent the illicit activities of money laundering and financing terrorism via crypto.
The said worldwide crypto system will be designed and developed by the Financial Action Task Force (FATF), an international organization comprising more than 30 member countries and economies under the sponsorship of the G20, which has already recommended more strict regulation on the cryptocurrency market. The organization is supposed to create a blueprint of the crypto system by 2020 and will implement it in the upcoming years. According to the crypto news report, the newly developed system will be managed by firms from the private sector.
Many countries haven’t formed any regulatory framework for cryptocurrencies yet and it is believed that the proposal of developing a new system may speed up as international cooperation is getting tighter. Around 15 countries are planning to implement the new legal measures regarding digital assets.
Japan was the first nation to introduce the regulatory framework for cryptocurrencies and related businesses in 2017 by making crypto exchanges required to register with the financial regulatory body of the country. The Japanese government is also set to establish a SWIFT-like system for cryptocurrency transactions. However, as cryptocurrencies are being unregulated in many countries all over the world, it is quite challenging task to create uniform international rules across the globe.
In the recent meeting of G20 countries held in June in Japan, finance ministers and central bank governors have agreed to introduce new crypto regulations and legal measurements and start working towards introducing licensing and registration systems for cryptocurrency exchange operators. Furthermore, they agreed to work on eliminating vulnerabilities in the system that allows illicit activities funded by cryptocurrencies.
Sacrificing Privacy to Stop Crime Funded by Crypto
Governments of different counties are adopting different policies for cryptocurrencies and related businesses. Some of them have banned cryptocurrencies; yet, many did adopt blockchain technology while others have fully welcomed cryptocurrencies. Other countries acknowledge cryptocurrencies as legal, but with predefined terms and conditions. In other words, they have created a strict regulatory framework for digital currencies that sacrifices some of the user privacy in order to prevent criminal acts.
Its been well known that cryptocurrencies have long been associated with illegal activities such as money laundering, financing terrorism, buying drugs and other illicit substances from the dark web. To stop these illegal activities, the 15 different governments are planning to develop new infrastructure for cryptocurrencies that shares personal data of users who are associated with cryptocurrency transactions.
Gathering imperative information of users who execute cryptocurrency transactions will help regulators to track where the money is going, even on the expanse of privacy.