‘Stablecoins’ vulnerable to criminal abuse, FATF says

‘Stablecoins’ are a type of digital currency that aims to maintain a stable value relative to that of an underlying asset or benchmark.

The Financial Action Task Force, in a report to the G-20 on such currencies, identified vulnerabilities within so-called stablecoins and said risks should be mitigated before such digital currencies are launched, especially if they have mass adoption potential.

‘Stablecoins’ face some of the same money-laundering and terrorist-financing risks as other virtual assets, such as increased anonymity and quick exchanges of virtual assets to help disguise the origins of illicit funds, the FATF said.

The FATF proposed that all jurisdictions implement its guidance on virtual assets which were incorporated into its assessment methodology late 2019. they praised the fact that some 25 countries or regions among its members have made progress in implementing said standards.

Finally, the FATF committed to review the implementation and impact of its standards by June 2021 and provide further guidance.

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