Regulations around the world on the crypto, digital asset are in motion. These regulations are not just applied to the stablecoins but also the exchanges. Which goes to show that govt are learning from each others policies and improving the regulatory framework.
FATF also known as the financial action task force has variety of the documents that explains how the money laundering and the crinimal financial trail happens. That has been taking into consideration by variety of the crypto regulators.
United kingdom already had the travel rule policy on the digital assets and it was applied to binance and variety of other exchanges which have the license on the crypto trading and the market. So now this same travel rule policy is applied by UAE too.
Let's take a look at the UAE regulation's recent policy change of the travel rule on the crypto assets.
What is FATF: Crypto Travel Rule 2023
FATF sets a rule for the criminal activities that happens cross border and inter border too. So they have made some observations about the movement of the funds. In case of the crypto the funds are moved from one to another place and there seems to be an anonymity. Like this is where the criminal role goes really strong.
So this rule from the FATF expects the blockchain network to be more open towards the end point. And this is only possible when the private chains showcase the movement of the funds. So though ethereum and bitcoin are anonymous, other chains are forced for the disclosure. Which is not in the spirit of decentralization but more of a control of govt.
UAE Regulating Crypto with Travel Rule
Let's face the fact that UAE won't be able to apply this rule on the chains which are public and anonymous. Like say monero, ethereum, bitcoin and other chains. Where you can notice that they wont be applying the same for the transctions. And this goes to show that this new travel rule would apply to venture capitalist chains.
This includes Link, Solana, Avalanche and variety of other chains where there are venture capitalist funding and the people are being asked by the govt to show up the chain data and the movement of the funds especially when there are criminal cases involved in such transactions. Which kind of defeats the purpose of the crypto.
Does FATF Policy hurts the Crypto
You bet it does affect crypto. Because they want open transactions like the SWIFT and IBAN. And they want to see who is sending the money to who and how that is making any difference to the actual sending of the funds. Like say they want to avoid cases like hamas getting funds through iran for continuation of the war.
What can be done about it? We as a decentralized supporters we have to continue to stay invested into the coins that are specific to the anonymity and the cryptic nature of the sending and accepting the funds. This is the only way we can keep the freedom in the internet money space Which is what we should be standing up for.
UAE has all the rights to stay compliant to the FATF and the travel rule for the digital assets. Though this rule does affect average consumer who wants to keep things anonymous. We have to respect how the new changes are coming in the centralized world.