The Financial Action Task Force (FATF) is the organisation that monitors every country's money clearance procedures in order to stop money laundering, prevent unlawful actions, and protect society from terrorist financing. This force is in the global money, and every country is subject to it and must obey it.
THE SIGNIFICANCE OF FATF'S GREY AND BLACK LISTS IN MONITORING COUNTRY COMPLIANCE
FATF features Grey and Black lists, each with a particular meaning. The countries on the grey list are those that obey FATF regulations and laws, whereas the countries on the black list are those who do not. If a country remains on the black list, it risks losing access to other countries' assist, imports, and exports.
Grey list countries are in high demand around the world and are among those with strict regulations for funding and fighting money laundering. Why is this force essential for countries? It will assist governments in controlling the flow of money and screening their funds for money laundering or other terrorist financial crimes.
What do the IMF and FATF have to say about cryptocurrency? According to my information and study, they do not have tight cryptocurrency guidelines, but they do deal with country regulations involving cryptocurrencies. Many analysts believe that the FATF and IMF dislike cryptocurrency because it hurts banking finance and facilitates money laundering through crypto transactions.
Also, they claim that all terrorist activities are paid for with cryptocurrencies, but there are no standards governing this. It is obvious that every organisation around the world has a desire for tight financial laws. The same is true for bitcoin or cryptocurrency, which has the potential to be used for terrorist financing and money laundering, but this does not indicate that cryptocurrencies should be banned.
Pakistan has been placed on FATF's grey list after a long period of time, indicating that the country complies with the organization's standards. They are put on the grey list because they are attempting to reduce money laundering and financial concerns in the country. A week ago, the country's finance minister declared that cryptocurrencies will not be legalised in the country.
THE CONTROVERSY SURROUNDING CRYPTOCURRENCY BAN IN PAKISTAN
They have completely prohibited the trade in of cryptocurrencies in the country and have declared that anyone found dealing with cryptocurrency will face severe penalties. One of the reasons they indicated that the FATF and IMF offer Pakistan to ban cryptocurrency is for a variety of reasons that they do not mention. They claim that if we continue to let crypto in the country, Pakistan may be blacklisted again.
That is why Pakistan will not allow crypto transactions in the country since the country is in debt, and the only option is an IMF loan. If they do not pay attention, the loan agreement with Pakistan would be terminated. But, to the best of my understanding, if cryptocurrency is the reason for money laundering or to move them to black list then why Dubai is in grey list?
We are all aware that Dubai has been recognised as a global Crypto Hub. People from all over the world travelled to Dubai just to learn about cryptocurrency and to trade cryptocurrencies. This is the country that has been designated as the hub for cryptocurrency transactions and trading. However, there are no such FATF guidelines or demands to prohibit cryptocurrency nor there is chance for the country to move to black list.
That suggests the Pakistani Finance Minister's declaration was a lie, and they have other difficulties with cryptocurrency. There is no FATF request to prohibit cryptocurrency, but this is the only country that want to do so. It is for them that they cannot ban cryptocurrency, but can only ban applications that use cryptocurrency, and the answer for this is to run VPN.
This is an attempt on my side to clarify the FATF and IMF demands surrounding cryptocurrencies. I also attempted to explain the FATF lists and the implications of the grey and black lists. I hope you find this post beneficial. If you like the post, please leave a review in the comments section to help the next one be even better. Thank you for sticking with me until the end.
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IMAGES AND GIF TAKEN FROM CANVA, EDITED IN CANVA
