Public-Private Partnerships and Global Standards for Virtual Assets
David Lewis, Executive Secretary, Financial Action Task Force (FATF)
Originally published in the GDF Annual Report 2020
The Financial Action Task Force (FATF) leads global action by governments on money laundering, the financing of terrorism, and the proliferation of weapons of mass destruction. Its global standards apply to the activities that generate these risks, and the same rules apply to the same activities.
In 2019, these risks resulted in new global standards for virtual assets. The risks are real, as highlighted by the 2020 FATF red flags report, and continue to evolve, with virtual assets used to hide the proceeds of criminal exploitation of the response to the COVID-19 pandemic.
FATF’s 12-month review report in June 2020 showed that many governments had already implemented the new global standards, while in the private sector, 2020 saw the development of technology and protocols for compliance with the ‘travel rule’. At the same time, the virtual asset sector has continued its rapid pace of change and innovation, keeping the attention of global policy makers, including accelerating the interest of G20 Finance Ministers and Central Bank Governors in so-called stablecoins.
However, it remains early days. To ensure regulatory alignment, all countries must implement the FATF Standards as a priority. The FATF is monitoring progress, assessing implementation by governments and publishing the results. In 2021, industry needs to use the innovative solutions being developed to implement the travel rule fully and effectively. In June, the FATF will report again on progress, through a second 12-month review, and with a focus on key issues such as peer-to-peer transactions and decentralized finance.
The FATF Standards are technology neutral, but the FATF is not technology silent. There are opportunities as well as risks in new technologies. It is important to target harden businesses against these risks in order to help realized the opportunities that technology can bring, from virtual assets to digital identity. Continued public-private partnership is critical and GDF has successfully helped capture and communicate the voice of the sector.
These are exciting times. The FATF is clearly committed to public-private partnership and making sure its standards are fit for purpose, fit for the future, and can be implemented on the ground so that technology can be the gamechanger it needs to be.
Read more from regulators, policy makers, and industry leaders in the GDF Annual Report here.
Press date : 17.02.2020
