[NEWS] G7 to ask FATF to consider regulating private transactions of crypto assets

It has been learned that the G7 (Group of Seven) will request the Financial Action Task Force (FATF) to consider the establishment of regulations for cryptocurrency (virtual currency) transactions between individuals. The Nihon Keizai Shimbun reported on the 11th.

Currently, as part of anti-money laundering (AML) and counter-terrorist financing (CFT) measures, the "travel rule" requires that cryptocurrency exchanges and other service providers provide some information about the sender and receiver of cryptocurrency for transactions between them. On the other hand, the question of whether to strengthen monitoring of transactions between individuals has been an issue.

Japan will chair the G7 summit this year, and the summit will be held in Hiroshima from the 19th of this month.

The G7 will request an examination of the issues and necessary measures when discussing financial regulations at the Finance Ministry and Central Bank Governors' Meeting to be held before the summit.

Specific measures will be proposed and implemented by the FATF. In order to prevent fraudulent private transactions, measures such as strict customer management for cryptocurrency exchanges and cooperation between private analysis companies and regulatory authorities to precisely grasp the actual situation of suspicious transactions are being considered.

According to the Nihon Keizai Shimbun, financial authorities have said that "cryptocurrency is spreading rapidly, including in emerging countries, and we cannot leave it alone."

There is a strong view that private transactions of cryptocurrency are often used to send and receive illicit funds for illegal drug trafficking, fraud, and other crimes.

Blockchain is characterized by its high transparency and ability to trace transactions. On the other hand, there are also cryptocurrency mixing services that make it difficult to trace transactions.

According to blockchain analysis company Chainalysis, money laundering using cryptocurrencies reached $23.8 billion (approximately 3.2 trillion yen) in 2022, up 68% from the previous year.

In particular, there is a lot of money laundering through person-to-person transactions, and the G7 seems to have decided that it should be considered, even though the hurdles to regulation are high.

Reference:Nihon Keizai Shimbun
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