A global watchdog for illicit finance that watches out suspicious financial activity has had their say on cryptos and stablecoins in particular.
The Paris-based Financial Action Task Force (FATF) said:
“If stablecoins were to become widespread, it could potentially lead to new risks regarding money laundering and terrorist financing,” FATF president Xiangmin Liu
Stablecoins can be peer to peer transactions with the ability to cut out financially regulated middlemen. The issue is tracking the illicit transactions, the brokers and exchanges need to do more to track payments used for illegal purposes. The creators of the stablecoins will need to appease financial regulators if they are to get governmental and regulatory approval.
The FATF say “It is our job to ensure the new risks in connection with stablecoins will be adequately addressed.”
The FATF are not alone in their condemnation of stablecoins as many governments and central banks around the world have voiced the same concerns. It is still unclear what the cryptocurrency companies are going to do about this. The Libra Association have said they will not launch to the mass market until they have met all necessary regulations. The other major companies still need to comment. It is fair for regulators to be concerned but working on regulations together could be a great step forward. Facebook’s Mark Zuckerberg is set to stand before the Senate later in the month to answer questions about Libra and its fair to say it will be closely watched.
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