European Central Bank releases report on cross-border payments
The European Central Bank has released a report on the search for the ‘holy grail’ of cross-border payments. The report states that cross-border payment solutions must be immediate, cheap, universal, and secure. It concludes that Central Bank Digital Currency has the potential to outperform other alternate currencies such as Bitcoin and Stablecoin. The search for a ‘holy grail’ cross-border payment solution was declared a priority at the G20 forum in 2020 as it is central to international and trade economic activity.
The United Arab Emirates addresses crypto regulation concerns
Due to money laundering concerns, the United Arab Emirates (UAE) has been placed on the watchlist by the Financial Action Task Force (FATF). In response, the UAE has formed the Abu Dhabi Blockchain and Virtual Assets Committee (ADBVAC). The first meeting was held this month, with the committee aiming to build a robust system to address key risks related to virtual assets and blockchain. The ADBVAC understands the detrimental effects of being placed on the FATF ‘grey list’ and is focused on building a solution that is transparent and meets compliance regulations.
Expats put on notice in Sri Lanka
Sri Lanka is set to introduce a money laundering law in coordination with the central bank to target expat workers using unofficial channels to transmit money. Expat workers have been importing essential and non-essential goods outside the formal banking system, which has reduced remittances and contributed to Sri Lanka’s currency crisis. At the request of the Governor of the central bank, a special unit has been set up by the Illegal Assents Investigation division to address these issues.
Pakistan called to target terrorist groups
The Financial Action Task Force (FATF) has called on Islamabad (Pakistan) to act against UN-designated terrorists in the hope that they can be removed from the FATF’s grey list. According to the FATF, Pakistan has taken insincere action to target terrorist groups and counter money laundering. The lack of cooperation from Pakistan officials has resulted in terrorist groups flocking to social media platforms to request donations, which will likely fund illicit activity. Pakistan’s inaction on key compliances of the FATF could have potentially adverse consequences for the region’s security and beyond.
History-making US Privacy Legislation has one obstacle
The American Data Privacy and Protection Act (ADPPA) is gaining popularity due to its aim of reducing the collection and trafficking of intimate information. As the act introduces new privacy baselines to companies and bans discriminatory data handling, the increased support by consumers is giving a positive indication of how the bill will fare in the Senate. However, the passing of this bill may be prevented by one of America’s most powerful federal lawmakers, Rep. Nancy Pelosi. As the ADPPA is federal, it has the power to pre-empt current state laws. Pelosi argues that California’s current robust laws could be threatened as the proposed bill would not provide the same level of privacy. She also highlights that the bill would prevent California and its privacy advocates from continuing to develop stronger privacy laws.
The FATF and INTERPOL join forces
The Financial Action Task Force (FATF) and INTERPOL have joined forces to increase the focus on asset recovery when addressing the ongoing issue of money laundering and terrorist financing. At the first-ever FATF-INTERPOL Roundtable Engagement (FIRE) event, 150 high-level experts gathered to discuss key efforts which would contribute to the unified goal of decreasing the magnitude of illicit funds being transferred across borders. Initiatives such as effective information sharing, enhanced operational cooperation and prioritising the tracing of criminal assets were all agreed to be pressing factors to counteract transnational crime. According to FATF President, T Raja Kumar, making asset recovery a priority at a national level “sets the tone for all stakeholders”.
Myanmar blacklisted by FATF
The US government has ordered the Financial Action Task Force (FATF) to blacklist Myanmar, disallowing its involvement in future global economic activities. The Financial Action Task Force has cited the lack of progress shown by the military-ruled country as the reason for its inclusion on the backlist. However, many believe the reasoning behind the request is the US government’s concern for the growing relationship between Russia and Myanmar.