Regulation of cryptocurrencies has been a major problem for countries that want to make use of their unique features. Countries like China and India have a hawkish stance on digital coins and have tried to curb their local crypto markets. The European Union, on the other hand, adopts a flexible approach to digital coins and has adopted a very positive stance on blockchains.
In consideration of cryptocurrency regulations, on Friday, the Financial Action Task Force (FATF), the global watchdog for money laundering, suggested that it would release its first set of rules for digital assets by June 2019.
A Few More Months to Go
Cryptocurrencies have managed to gain the attention of governments around the globe. It could be difficult to create regulations for a sector as new and technologically advanced as cryptocurrencies. There are certain apprehensions regarding the eventual takeover of digital currencies over fiat currencies.
In June next year, the FATF will be designing its first set of digital currency regulations. In the upcoming months, the agency will get busy in working to create international standards that could help in removing a patchy framework of regulations on digital currencies.
The Paris-based institution said that jurisdictions from around the world would have to work on licenses to regulate digital currency exchanges and encrypted wallet service providers. This will help in eradicating problems related to money laundering, terrorist financing, and other crimes using digital currencies.
Rules for ICO
Apart from wallets and crypto exchanges, the watchdog also aims to regulate firms issuing new coins via initial coin offerings. These coins can be utility tokens issued within a restricted blockchain framework of an enterprise or can be used as digital trading assets, which could lead to price speculation.
Regulation for digital currencies has been difficult because of differences in opinions from different jurisdictions. President Marshall Billingslea suggested that the watchdog will conduct periodic reviews on how countries implement their cryptocurrency-related rules. The countries that fall short of the agency’s guidelines could be added to the FATF blacklist, which restricts access to global financial systems.