G20 calls on countries to adopt FATF crypto standards

The G20 has urged countries to adopt the Financial Action Task Force (FATF) standards on virtual assets and virtual asset service providers, which were adopted in June last year.

What has happened?

After a summit in Riyadh, Saudi Arabia, representatives from the G20 called on countries to adopt the FATF standards on virtual assets and related providers.

"We urge countries to implement the recently adopted Financial Action Task Force (FATF) standards on virtual assets and related providers," the G20 said in a communiqué released after the summit.

What does this mean?

In June last year, the global anti-money laundering (AML) organisation finalised its interpretative note to Recommendation 15, which clarified how its standards and measures should apply in respect of virtual assets and virtual asset service providers (VASPs).

One of the most notable (and controversial) requirements relates to the so-called 'travel rule'.

This stipulates that countries should ensure that VASPs should "obtain and hold required and accurate originator information and required beneficiary information on virtual asset transfers, submit the above information to the beneficiary VASP or financial institution (if any) immediately and securely, and make it available on request to appropriate authorities".

The required information under this "travel rule" should cover the:

  • sender's name;
  • sender’s account number where such an account is used to process the transaction (e.g., the virtual asset wallet);
  • sender’s physical address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the sender to the ordering institution, or date and place of birth;
  • recipient's name; and
  • recipient account number where such an account is used to process the transaction (e.g., the virtual wallet).

The G20 formally adopted the FATF recommendations last July.

In its statement, the G20 also said that it "remains vigilant to potential risks arising from financial innovations, including those risks related to financial stability, consumer and investor protection,… AML and CFT as well as their macroeconomic implications, including monetary sovereignty issues."

On global stablecoins, the international forum for the governments and central bank governors from 19 countries and the European Union, also reiterated its October 2019 statement, stating that the risks linked to them and to similar arrangements need to be evaluated and appropriately addressed before they can start operation.

In addition, the G20 said that it supports the Financial Stability Board's (FSB) efforts to develop regulatory recommendations in respect of global stablecoins and the like.

"We recognize the need to enhance global cross-border payment arrangements to facilitate lower-cost and swifter transfers, including for remittances. We ask the FSB, in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant standard-setting bodies and international organizations, to develop a roadmap to enhance global cross-border payment arrangements by October 2020."

Next steps

Please let us know if you have any questions on the FATF standards, its 'travel rule' or any other issue mentioned in this article.

Also, you can keep track of regulatory developments in respect of blockchain technology and its applications with our Blockchain Toolkit.

 

© 2020 Hogan Lovells. All rights reserved. "Hogan Lovells" or the “firm” refers to the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses, each of which is a separate legal entity. Attorney advertising. Prior results do not guarantee a similar outcome.  Hogan Lovells (Luxembourg) LLP is a limited liability partnership registered in England and Wales with registered number OC350977 and registered also with the Luxembourg bar.  Registered office: Atlantic House, Holborn Viaduct, Holborn Viaduct, London EC1A 2FG.