The Financial Action Task Force (FATF) has taken note of the issues hindering partnerships between bitcoin businesses and banks.
At a Brussels meeting with industry figures last Friday, the anti-money laundering policy maker proposed a risk-based approach that ensures every digital currency business is evaluated on an individual basis.
A risk-based approach means that banks identify and assess the money laundering and terrorist financing risks they are exposed to, setting the appropriate mitigation measures accordingly.
Securing a banking partner has proved to be notoriously difficult for bitcoin businesses. FATF’s proposal hopes to move the digital currency sector away from the current de-risking model which, according to industry insiders, has seen banks closing or denying bank accounts to bitcoin businesses, citing money laundering as a blanket term.
The policy maker discussed its plans at the plenary meeting to get the opinion of digital currency industry insiders. Siân Jones, the co-lead of regulation and banking group at the UK Digital Currency Association was in attendance.
She told CoinDesk:
“In a way the organisation is supportive of bitcoin businesses and them not being denied bank accounts. I think that there is also concern that by denying [bank accounts to] whole industries or sectors of industries there is the unintended consequence of driving the money transmission systems underground.”
Jones is of the opinion that FATF does not want to deride anti-money laundering, but is instead concerned in learning more about the issue to manage it in an “effective and appropriate way”.
She concluded:
“I felt that the session was very constructive, there was a good dialogue. FATF was listening and there was a good demonstration that indicated that they actually understood some of the issues [facing the industry].”
Digital currency regulation
FATF also focused on the different approaches adopted by some countries to regulate and supervise digital currency exchanges – with the UK government recently announcing that it was planning to apply anti-money laundering regulations to digital currencies earlier this month.
Moderated by FATF co-chairs Jennifer Fowler and Juan Manuel Serrano Vega, the plenary meeting was intended to build on the Private Sector Consultative Meeting of 2014 and the publication of a report that established a conceptual framework of key definitions to form the basis for further policy development.
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