31 Jul 2021

Virtual assets adoption accelerates as the FATF prepares for new Travel Rule updates

A quick update on Travel Rule news: 

The FATF recently concluded its June meeting and second 12-month review of the Travel Rule, which did not deliver any additional or major regulatory surprises. The global financial watchdog will wait until the upcoming October meeting to issue their final update to the Virtual Asset (VA) and Virtual Asset Service Provider (VASP) guidance, in order to provide more time for gathering additional industry feedback.

The first half of 2021 has seen accelerating adoption and expansion of the VA/VASP space - significant events include: 

  • PayPal has launched Crypto Checkout Service
  • Coinbase went Public with a direct listing on Nasdaq
  • S&P launched cryptocurrency indexes, debuting with Bitcoin and Ether
  • In a world-first, El Savador makes Bitcoin legal tender

These developments serve to highlight the fact that regulators and the virtual asset industry are still at odds despite the growth in the space, and can often seem to be pulling in different directions. 

It remains to be seen what the FATF may decide in the forthcoming October update as it seeks to find a balance by developing innovative regulation for what is a disruptive force to the current financial system.

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