Sometimes it is easy to get lost in the euphoria of Bitcoin’s recent gains, that we forget to pay attention to developments such as the V20 Summit that could potentially define the future of the cryptocurrency industry — including Bitcoin.
Last week, the Financial Action Task Force (FATF) finally released its new regulatory framework for countries looking to regulate cryptocurrency businesses operating in the jurisdiction.
The 52-page document titled —Guidance For a Risk-based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs) — spelled out some strict rules for crypto platforms to comply with within the next year.
However, none of those rules catches the eye as much as the requirement that crypto platforms must share user data for every single transaction.
That looked simple, but not if you go in detail to discover that it would require that these platforms would have to go beyond the usual Know-Your-Customer (KYC) procedure carried out by crypto exchanges.
As crypto regulation focused news agency, Stmarket.co explained,
“Crypto platforms initiating a transaction must hold accurate data regarding the individual or corporation in question and also information regarding the recipient. They would have to share this information with the receiving platform before processing the transaction and also make it available to local authorities upon request.”
No doubt, adopting such an approach goes against the real reason why cryptocurrencies exist and could potentially make crypto transactions slower.
Do not forget that these data flow between crypto platforms globally must occur with each transaction and must come into play if you the crypto user wants to move more than 1000 USD/EUR. It is also worth noting that most transactions involving cryptocurrencies go through exchanges and wallet providers.
For that reason, the new rules by the FATF clearly would have severe implication for the industry, and is the same reason why the V20 Summit is essential to all of us.
What is the V20 Summit?
The V20 Summit is a critical two-day event dedicated to influencing the new rules proposed by the FATF for crypto platforms.
It will take place in the location (Osaka, Japan) and on the same days when G20 member countries would come together to place a rubber stamp on the stringent rules that we believe could negatively affect crypto adoption in the coming years.
The meeting famously labeled as the V20 Summit would seek to host a roundtable for crypto industry proponents, FATF and G20 representatives, as well as government officials, to deliberate on the rules.
The goal would be to issue a regulatory framework that the industry believes could influence the FATF rules while at the same time ensuring sufficient regulatory oversight for the community.
At the same time, the crypto industry participants at the meeting would seek to get an extended period to build the necessary infrastructure for the burdensome data collection requirement that the FATF wants to impose.
Undoubtedly, the result of the meeting would have a significant impact on the crypto industry and its quest to establish itself among the elites of players in the global financial system.
Hopefully, a favorable outcome would allow us to focus on the price of Bitcoin once again, without worrying about losing the right to transact cryptocurrencies as freely as we do right now.