German executive Marcus Pleyer will assume command of the organization for the period 2020-2022. The German Presidency announced an initiative to monitor the risks and opportunities of virtual assets.
Keeping an eye on cryptocurrencies as part of the new standard to combat money laundering and terrorist financing (AML/CFT), Germany assumed the presidency of the international Financial Action Task Force (FATF).
Marcus Pleyer, German Executive, who serves as Deputy Director-General in his country’s Federal Ministry of Finance, will be in command of the organization for the period 2020-2022. Pleyer replaced China’s Xiangmin Liu in the presidency.
A memorandum outlines the priorities that the FATF will have for the next two years. The digital transformation of financial services is in the first place. In the document, the audit entity mentions the new standard for virtual assets to address possible emerging risks.
The agency stated that the German Presidency intends to take advantage of this work, focusing on the opportunities that technology can offer. For this reason, they will launch an initiative to monitor risks and explore the opportunities that the digital transformation of their economies and societies brings to AML and CFT.
The tone of the document does not go directly against Bitcoin or cryptocurrencies in general. It rather establishes a starting point to learn about the challenges and opportunities that they offer to make their regulatory activity more efficient.
At this point, it is important to remember that the FATF published guidelines on cryptocurrencies in 2014 and 2015. Both guidelines define terms related to this ecosystem, but with a risk approach.
In the new priorities of the presidency, they also assume cryptocurrencies risk instruments. However, they are now talking about opportunities to improve their action against money laundering and terrorist financing.
Proximity of Germany to Cryptocurrencies
Germany’s assumption of the presidency of the FATF could open the door for greater visibility of cryptocurrencies. Unlike China as the outgoing presidency, Germany is friendlier towards cryptocurrencies. In the case of the Asian country, there is a prohibition on trading with this type of asset, as well as on any way of promoting it.
Another factor that could play in favor of virtual assets is the fact that Pleyer is directly related to the country’s Ministry of Finance. At this agency, they have made decisions to increase their use and acceptance.
In March 2018, the German Ministry of Finance exempted the payment of taxes on cryptocurrencies when people use them as a means of payment. The state institution added that cryptocurrencies facilitate the use of conventional payment methods.
In December 2019, the largest bank of Germany, Deutsche Bank, even stated that cryptocurrencies like Bitcoin will be the alternative to fiat currencies by 2030. More recently, in March 2020, the German Federal Financial Supervisory Authority (BaFin) stated that cryptocurrencies are financial instruments.
Germany has been able to see all the potential that Bitcoin and other cryptocurrencies have. When they assume the Presidency of the FATF, they will work hard to ensure the use and adoption in that European country.
By Alexander Salazar