FATF to update its guidelines on stablecoins and virtual asset service providers

TL;DR Breakdown

• FATF sets to revise its guidelines for VASPs and stablecoins.
• The new document will be made official in June and will be an upgrade to the travel rule for VASPs.

FAFT set to revise its guidelines  

The Financial Action Task Force (FATF) looks to upgrade its guidelines on stablecoins and crypto P2P transactions. It revealed that it is ready to issue its standard on cryptocurrencies and virtual assets service providers, which include exchanges, crypto custodians etc.

The FATF said that the latest document was going to be made publicly accessible for consultation by stakeholders. Furthermore, the reviewed guideline would be released in March.

Two years ago, the travel rule for VASPs was added to the guideline, which ensured that they remained transparent with their transaction data. Therefore, the revised document will be an upgrade to the previously published one. 

FATF makes headway with crypto enforcements

Last year, the FAFT made some headway related to enforcing the rule and other crypto regulations. According to an issued report by the organization last year, virtual asset service providers in the U.S. have been quite compliant.

Regarding the implementation of travel rule, exchanges in South Korea and Singapore were believed to be the most compliant, based on a report from Cointelegraph. The coming guideline will extend to stablecoins and crypto P2P transactions as well.

The public commentary is the last stage of the guideline update before it is finally made official in June. However, the efforts of the FATF has greatly reduced the occurrences of illegitimate crypto transactions and ensured compliance with the regulations.

According to a report from Chainalysis, a blockchain analysis firm, only a small fraction (0.34%) of the total crypto transactions last year were illegal. All thanks to the FATF, the rate of Illegal crypto transactions have dropped significantly since last year.