FATF "Anti-Money Laundering Standards to Apply to Facebook Cryptocurrency Libra and Others"

[Asia Economy Reporter Kim Hyo-jin] The Financial Services Commission announced on the 2nd that the Financial Action Task Force (FATF) has decided to apply anti-money laundering and counter-terrorist financing standards to stablecoins. Stablecoins are cryptocurrencies designed to be pegged to safe assets such as the dollar or euro, like Facebook's Libra.

According to the Financial Services Commission, FATF held its 3rd plenary meeting via video conference on the 24th of last month to discuss the impact of anti-money laundering and counter-terrorist financing measures on stablecoins. FATF issued a report on stablecoins at the request of the Group of Twenty (G20).

The report concluded that no separate amendments to FATF standards are necessary, as the existing standards apply to stablecoins and their service providers. This means that the newly emerged stablecoins will be subject to the same anti-money laundering and counter-terrorist financing standards as other cryptocurrencies.

FATF also prepared amendments to its standards related to proliferation financing. Proliferation financing refers to the funding used for the manufacture, acquisition, possession, or development of weapons of mass destruction. The amendments require countries and financial institutions to apply a Risk Based Approach to proliferation financing, conducting risk assessments and implementing appropriate risk mitigation measures.

The core of the Risk Based Approach is to apply enhanced preventive measures for high-risk cases and simplified measures for low-risk cases. FATF plans to gather feedback on the proliferation financing amendments and discuss them again at the plenary meeting in October this year.