A watchdog yesterday asserted that countries would need to ramp up controls on cryptocurrency transactions in order to work towards meeting international standards on transparency.
The Paris-based Financial Action Task Force (FATF) pointed out that countries had made only ‘limited progress’ in implementing its ‘travel rule’, which it had recommended for global adoption way back in 2015.
Africa Today News, New York reports that under the rule, regulators are supposed to ensure that cryptocurrency firms verify the identities of people involved in transactions — similar to the rules that govern regular banks.
The standard is thought of as a strategy to lessen the possibility that cryptocurrencies would be used to finance terrorism or money laundering.
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Recall that sometime in March this year, the FATF had surveyed 98 jurisdictions and found that only 29 had passed travel rule legislation and only 11 had started to enforce it.
The report said the gap in the rules left cryptoassets and crypto firms ‘vulnerable to misuse, and demonstrates the urgent need for jurisdictions to accelerate implementation and enforcement’.
Cryptocurrencies are largely unregulated and the value of the major ones tends to fluctuate wildly.
Africa Today News, New York reports that in recent months, the value has plummeted, with as much as two-thirds of the market value of the sector being wiped out.
Enthusiasts regard cryptocurrencies and the technology around them as the foundation of a decentralised alternative to the mainstream banking system and argue against any regulation.
But national authorities are increasingly leaning towards stiffer rules and consumer protection, as crypto firms push into the mainstream with high-profile TV advertising and celebrity endorsements.