Money laundering risks from “stablecoins” and other emerging assets

Paris, 18 October 2019

In June, the FATF introduced the first global standards to address the money laundering and terrorist financing risks of virtual assets. Today the FATF agreed how to assess countries’ implementation of these new requirements.

Given the global nature of virtual assets, it is essential that countries implement these requirements swiftly, in particular understanding the risks and ensuring the effective supervision of the sector. From now on, FATF will assess, as part of its mutual evaluations, how well countries are implementing these measures. Countries that have already undergone their mutual evaluation will be required to report back during their follow-up process on the actions they have taken in this area.

Emerging assets such as so-called global “stablecoins”, and their proposed global networks and platforms, could potentially cause a shift in the virtual asset ecosystem and have implications for the money laundering and terrorist financing risks. There are two concerns: mass-market adoption of virtual assets and person-to-person transfers, without the need for a regulated intermediary. Together these changes could have serious consequences for our ability to detect and prevent money laundering and terrorist financing.

In general terms, both global “stablecoins” and their service providers would be subject to the FATF standards either as virtual assets and virtual asset service providers or as traditional financial assets and their service providers. They should never be outside the scope of anti-money laundering controls.

The FATF is actively monitoring emerging assets including global “stablecoins”. It will continue to examine their characteristics and risks, and consider further clarifications on how the FATF standards apply to global “stablecoins” and their service providers, as well as whether further updates are necessary.

National authorities are responsible for implementing AML/CFT rules in their jurisdiction, through national laws and regulations. The FATF will work to promote effective global implementation of its standards as they apply to virtual assets and other emerging assets.

The FATF will continue to ensure its standards remain relevant and responsive and it will report to G20 Finance Ministers and Central Bank Governors in 2020 on the risks from global “stablecoins” and other emerging assets.