European Union Strives To Regulate Global Digital Payments Market

• On June 29, European Parliament members had already enacted the TFR.
• FATF members are chosen by their countries, not by a democratic process.

MiCA (Markets in Crypto-Assets), the E.U.’s major legislative plan to manage the crypto-asset business in its 27 member nations, received the green light on the final day of June. One day earlier, on June 29, European Parliament members had already enacted the Transfer of Funds Regulation (TFR) to combat money laundering in the cryptocurrency industry.

The financial Action Task Force (FATF) is an international intergovernmental body. The E.U. and most of the world’s major nations are members. FATF members are chosen by their countries, not by a democratic process. AML and other financial watchdog policies are developed by these individuals, who strive to provide recommendations. Even though these so-called proposals are not legally obligatory, the political and financial ramifications for a member nation that refuses to accept them may be severe.

Worldwide Digital Finance Standard 

While nations like Brazil debated their first legislation on cryptocurrencies in 2015, the FATF announced its first rules on crypto assets. First published in 2015 and reflecting the current U.S. Financial Crimes Enforcement Network policies, this document was reassessed in 2019, and a new document titled “Updated Guidance for a risk-based approach to virtual assets and VASPs” was released on October 28, 2021, with the current FATF guidelines on virtual assets.

For this reason, in addition to consumer protection and other well-known grounds for regulating the crypto market, E.U., U.S., and other FATF members are working hard. The European Commission’s 2020 digital finance package includes MiCA as one of the legislative measures. For the European Union to become a worldwide standard setter in digital finance and contemporary payments while protecting consumers, this digital finance package is a must-have for the global financial industry.

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