- Japan is leading a push to create a SWIFT-like network for crypto
- FATF will reportedly supervise the creation of the network
- Japan is on the frontline for developing crypto regulations
The government of Japan is leading a global push to create an international network for cryptocurrencies. The similar will resemble the SWIFT network, the international payments messaging system used by banks to send money around the world.
Money laundering and crypto
Quoting sources privy to the information, the global news agency Reuters reported on July 18 that the new network is expected to be in place in the next few years. As per the report, Japan has taken the step to fight against money laundering and will create a system that will ensure that all transactions are recorded according to the country’s regulations. The sources further informed that the network will be developed under the supervision of a Financial Action Task Force (FATF) action team.
SWIFT is an acronym that is often bandied about in the world of financial transactions and its stands for Society for Worldwide Interbank Financial Telecommunication. Financial institutions use the messaging network to securely transmit information and instructions through a standardized system of codes. SWIFT assigns each financial organization a unique code that has either eight characters or 11 characters. The code is interchangeably called the bank identifier code (BIC), SWIFT code, SWIFT ID, or ISO 9362 code.
Japan is optimistic about crypto – as long as it is regulated
According to the report, FATF approved the plan for setting up the network in June, which was proposed by Japan’s Ministry of Finance and the country’s financial regulator, the Financial Services Agency (FSA). Without there being too many details, it is still unclear at the moment how the cryptocurrency network would work, per the report.
Japan is a leading consumer of cryptocurrencies and it has taken several initiatives to tighten up the cryptocurrency industry. Back in 2017, the country passed a law that recognized bitcoin as a legal method of payment, as well as brought cryptocurrency exchanges under anti-money laundering (AML)/know-your-customer (KYC) rules.
The news comes at a time when cryptocurrencies are facing resistance from government agencies especially due to their unregulated nature. The lack of regulation is especially an issue of concern with governments and central banks.
The recent announcement by Facebook to launch its own digital coin, Libra, has encountered a barrage of resistance from regulators, governments and central banks that insist the social media giant must respect anti money-laundering rules and ensure the security of transactions and user data. A comment last week by US president Donald Trump is so far the highest profile mention of cryptocurrencies by a world leader.