The system would be created by the FATF (Financial Action Task Force), a global organization made up of over 30 member nations.
The objective is to establish elaborate procedures by 2020 and to make the platform a reality in the next few years. Once the system goes live, it would be administed by private entity.
Several nations have not yet developed regulations for cryptocurrencies, so global cooperation may quicken up the creation of legalities.
Nearly 15 nations, including the G-7 members, Australia and Singapore, will take part in the creation of the aforementioned system. Notably, Japan initially introduced a regulatory framework for cryptocurrency trading venues by establishing a registry in 2017.
As cryptocurrencies remain totally unregulated in some countries, developing a uniform global framework has been a big challenge.
Back in June, officials who participated in the G20 finance ministers and central bank governors meeting decided to create licensing and registration guidelines for cryptocurrency exchange operators. The participants also accepted to jointly work and strengthen supervision and plug loopholes that permit for illegal fund transfer.
The FATF also published guidance for a risk-based strategy with regard to cryptocurrencies and related service providers in June 2019. The document published by the authority explained several regulatory suggestions that should be implemented in 37 member countries, including tracking and reporting dubious trades by domestic crypto service providers.
Due to the guidance, four key South Korean cryptocurrency exchanges such as Bithumb, Coinone, Upbit and Korbit were slapped with stringent rules when they renewed their banking facility. On July 18, G7 finance ministers expressed concerns that cryptocurrencies such as Facebook’s stablecoin venture Libra may cause complications in the prevailing worldwide financial system, if left unregulated in a strict manner.