Global Exchange- The Financial Action Task Force thinks financial institutions should promote the expansion of Digital Identity globally. FATF promotes global expansion of Digital Identification Systems.
Draft guidance on global Digital IDs to enforce anti-money laundering (AML) and counter financing terrorism (CFT) regulations, was released b the FATF for governments, authorized organizations and shareholders.
The guidance is aimed at supporting anti-money laundering and countering terrorist financing risks. It mainly focuses on identifying security and liquidity problems during financial transactions.
According to FATF, the areas of focus include the following:
Threats Digital ID would pose to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) implementation
how it would facilitate the aspect of financial inclusion
how the system would help in monitoring of financial transactions
the impact on enforcing the intergovernmental body’s record-keeping management
The guidance mainly lists distributed ledger technology as a means to promote the development of Digital ID networks.
FATF stated cryptocurrency exchanges should “take an informed risk-based approach to relying on digital ID systems for Customer Due Diligence.”
The guidance, containing 77-pages, gives details of the issues in Digital ID systems and how they would affect the CDD process.
FATF highlighted the effects of Digital Identity in payment methods. The system can be used to find shareholders in transactions utilizing stablecoin- Globalxchange.
The organization released its guidance for crypto exchanges and virtual asset service providers. It encourages countries to use the KYC procedure in digital asset transfer processes.
Comments
Post a Comment